Although it is generally acknowledged that matrix vesicles and alkaline phosphatase are required for cartilage calcification, their precise role in initiation or propagation of mineralization remains controversial. We have investigated this problem in a neoplastic model of chondrogenesis, the Swarm rat chondrosarcoma. During serial transplantation these malignant chondrocytes fail to undergo terminal differentiation and do not calcify. To facilitate the study of maturational events in this neoplasm we have developed an intraperitoneal model which grows as discrete free floating tumor nodules. The youngest cells are those on the exterior and maturation progresses towards the center. Ultrastructural examination of the tumor reveals the presence of numerous matrix vesicles in the interterritorial matrix of immature and mature cells. Histochemical localization of alkaline phosphatase reveals a distribution of enzyme activity which varies with the state of maturation of the cells. The most immature cells express large amounts of enzyme on their plasmalemma and in inter-territorial matrix vesicles. The older cells lose membrane activity but maintain activity in their matrix vesicles. These results suggest that while matrix vesicles and/or alkaline phosphatase may be necessary for calcification to proceed, their mere presence is by itself insufficient to initiate or maintain the process.