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To examine the mechanism underlying this process, we examined the role of perlecan in the proliferation and differentiation of synovial mesenchymal cells (SMCs), using a recently established mouse synovial cell culture method. Primary SMCs isolated from Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg (Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>;Col2a1\u2010Hspg2<jats:sup>Tg\/\u2212<\/jats:sup>) mice, in which the perlecan\u2010knockout was rescued from perinatal lethality, lack perlecan. The chondrogenic\u2010, osteogenic\u2010, and adipogenic\u2010potentials were examined in the Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs compared to the control SMCs prepared from wild\u2010type Hspg2<jats:sup>+\/+<\/jats:sup>\u2010Tg (Hspg2<jats:sup>+\/+<\/jats:sup>;Col2a1\u2010Hspg2<jats:sup>Tg\/\u2212<\/jats:sup>) littermates. In a culture condition permitting proliferation, both control and Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs showed similar rates of proliferation and expression of cell surface markers. However, in micromass cultures, the cartilage matrix production and Sox9 and Col2a1 mRNA levels were significantly reduced in Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs, compared with control SMCs. The reduced level of Sox9 mRNA was restored by the supplementation with exogenous perlecan protein. There was no difference in osteogenic differentiation between the control and Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs, as measured by the levels of Runx2 and Col1a1 mRNA. The adipogenic induction and PPAR\u03b3 mRNA levels were significantly reduced in Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs compared to control SMCs. The reduction of PPAR\u03b3 mRNA levels in Hspg2<jats:sup>\u2212\/\u2212<\/jats:sup>\u2010Tg SMCs was restored by supplementation of perlecan. Perlecan is required for the chondrogenic and adipogenic differentiation from SMCs via its regulation of the Sox9 and PPAR\u03b3 gene expression, but not for osteogenic differentiation via Runx2. \u00a9 2016 Orthopaedic Research Society. Published by Wiley Periodicals, Inc. 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