Collagenase‐3 (MMP‐13) is a novel matrix metalloproteinase, the expression of which has so far only been documented in human breast carcinomas and osteoarthritic cartilage. In this study we have examined the expression of MMP‐13 during human fetal development. Northern blot hybridizations revealed abundant expression of MMP‐13 mRNAs in total RNA from fetal cartilage and calvaria at gestational age of 15 weeks. By in situ hybridization MMP‐13 transcripts were detected in chondrocytes of hypertrophic cartilage in vertebrae of the spinal column and in the dorsal end of ribs undergoing ossification, as well as in osteoblasts and periosteal cells below the inner periosteal region of ossified ribs. In contrast, no expression of MMP‐13 could be detected in osteoclasts. Furthermore, expression of MMP‐13 mRNA was detected in osteoblasts and fibroblasts primarily on the inner side of calvarial bone of the skull at 16 weeks of gestation. Expression of MMP‐13 mRNA by primary human fetal chondrocytes in culture was enhanced by transforming growth factor‐β (TGF‐β) and inhibited by bone morphogenetic protein‐2 (BMP‐2). No expression of MMP‐13 mRNA could be noted in other fetal tissues, including the skin, lungs, neural tissue, muscle, and liver. These results suggest that MMP‐13 plays an important role in the extracellular matrix remodeling during fetal bone development both via endochondral and intramembranous ossification. Dev. Dyn. 208:387–395, 1997. © 1997 Wiley‐Liss, Inc.