This study examined the presence of extracellular matrix processing enzymes in matrix vesicles produced by rat costochondral resting zone and growth zone chondrocytes in culture. Optimum procedures for the extraction of each enzyme activity were determined. Enzyme activity associated with chondrocyte plasma membrane microsomes was used for comparison. There was a differential distribution of the enzyme activities related to the cartilage zone from which the cells were isolated. Acid and neutral metalloproteinase (TIMP), plasminogen activator, and beta-glucuronidase were highest in the growth zone chondrocyte (GC) membrane fractions when compared with matrix vesicles and plasma membranes isolated from resting zone chondrocyte (RC) cultures. There was a threefold enrichment of total and active acid metalloproteinase in GC matrix vesicles, whereas no enrichment in enzyme activity was observed in RC matrix vesicles. Total and active neutral metalloproteinase were similarly enriched twofold in GC matrix vesicles. TIMP, plasminogen activator, and beta-glucuronidase activities were highest in the plasma membranes of both cell types. No collagenase, lysozyme, or hyaluronidase activity was found in any of the membrane fractions. The data indicate that matrix vesicles are selectively enriched in enzymes which degrade proteoglycans. The highest concentrations of these enzymes are found in matrix vesicles produced by growth zone chondrocytes, suggesting that this may be a mechanism by which the more differentiated cell modulates the matrix for calcification.