Formation of cartilage during both embryonic development and repair processes involves the differentiation of multipotential mesenchymal cells. The mouse cell line, C3H10T1/2, has been shown to be multipotential and capable of differentiating into various phenotypes normally derived from embryonic mesoderm, including myocytes, adipocytes and chondrocytes. In this study, we have analyzed the induction of chondrogenesis in C3H10T1/2 cells by transforming growth factor‐β (TGF‐β1, human recombinant form). Treatment of high‐density micromass cultures of C3H10T1/2 cells with TGF‐β1 resulted in the formation of a three dimensional spheroid structure, which exhibited cartilage‐like histology. Extracellular matrix components characteristic of cartilage, type II collagen and cartilage link protein, were demonstrated by immunohistochemistry. TGF‐β1 treatment increased collagen synthesis, and immunoblot analysis showed the presence of type II collagen in TGF‐β1‐treated micromass cultures, but not in TGF‐β1‐treated monolayer cultures nor in untreated cultures. An increase in radioactive sulfate uptake relative to DNA synthesis was also seen in TGF‐β1‐treated micromass cultures forming spheroids, indicating the increased synthesis of sulfated proteoglycans. These observations indicated that the spheroids formed are of a cartilaginous nature, and that multipotential C3H10T1/2 cells, which do not spontaneously enter the chondrogenic pathway, can be induced to undergo cellular differentiation towards chondrogenesis in vitro through culture in a favorable environment.