Growth of embryonic chicken sternal chondrocytes in the presence of phorbol-12-myristate-13-acetate (PMA), a potent tumor promoter, resulted in a dramatic morphological change from spherical floating cells to adherent fibroblastic cells. This morphological change was accompanied by a quantitative switch from synthesis of cartilage-specific type II procollagen to type I procollagen. Type II procollagen mRNA levels decreased 10-fold in PMA-treated cells. Activation of type I collagen genes led to the accumulation of type I procollagen mRNA levels comparable to those of type II mRNA in these cells. However, only type I procollagen mRNA was translated. In addition to gene activation, unprocessed pro alpha 1(I) transcripts present at low levels in control chondrocytes were processed to mature mRNA species. Redifferentiation of PMA-treated chondrocytes was possible if cells were removed from PMA after the morphological change and cessation of type II procollagen synthesis but before detectable amounts of type I procollagen were synthesized. Production of type I collagen thus marks a late phase of chondrocyte "dedifferentiation" from which reversion is no longer possible. Redifferentiated cell populations contained 24-fold more pro alpha 1(II) collagen mRNA than pro alpha 1(I) collagen mRNA, but the rates of procollagen synthesis were comparable. This suggests that the PMA-mediated dedifferentiation of chondrocytes as well as their redifferentiation is under both transcriptional and posttranscriptional regulation.