Fibromodulin, a keratan‐sulfate proteoglycan, was first isolated in articular cartilage and tendons. We have identified fibromodulin as a gene regulated during BMP‐2‐induced differentiation of a mouse prechondroblastic cell line. Because expression of fibromodulin during endochondral bone formation has not been studied, we examined whether selected cells of the chondrocytic and osteoblastic lineage expressed fibromodulin. Fibromodulin mRNA was detected in conditionally immortalized murine bone marrow stromal cells, osteoblasts, and growth plate chondrocytes, as well as in primary murine calvarial osteoblasts. We, therefore, investigated the temporo‐spatial expression of fibromodulin in vivo during endochondral bone formation by in situ hybridization. Fibromodulin was first detected at 15.5 days post coitus (dpc) in the perichondrium and proliferating chondrocytes. Fibromodulin mRNA was also detected at 15.5 dpc in the bone collar and periosteum. At later time points fibromodulin was expressed in the primary spongiosa and the endosteum. To determine whether fibromodulin was expressed during intramembranous bone formation as well, in situ hybridization was performed on calvariae. Fibromodulin mRNA was present in calvarial osteoblasts from 15.5 dpc. These results demonstrate that fibromodulin is developmentally expressed in cartilage and bone cells during endochondral and intramembranous ossification. These findings suggest that this extracellular matrix protein plays a role in both endochondral and intramembranous bone formation. J. Cell. Biochem. 82: 46–57, 2001. © 2001 Wiley‐Liss, Inc.