We have previously demonstrated the association of the chicken lipocalin Ex-FABP with cartilage formation and inflammatory responses as a marker of these processes (Descalzi Cancedda et al., Biochim. Biophys. Acta 1482, 127-135, 2000). Here we report the isolation and characterisation of a new lipocalin gene laying upstream the Ex-FABP, thus representing the second member of a possible genomic cluster. This gene contains an open reading frame coding for a polypeptide of about 19 kDa. The amino-acid sequence revealed a conserved lipocalin secondary structure. Tissue distribution of the protein in developing embryos showed a preferential expression in the heart although mRNA transcripts could be detected also in muscle, lung and liver. The lowest expression was observed in the stomach, brain and skin. During endochondral formation of long bones, the protein is differentially distributed, as the transcripts, evidenced in the tibia by in situ hybridisation, are present in the hypertrophic cone of the cartilage and mostly absent in the area of the proliferating chondrocytes. Such developmental regulation was observed also in vitro in cultured chondrocytes where the transcripts were barely detectable in dedifferentiated cells but highly expressed in hypertrophic chondrocytes. The protein was also significantly induced by lipopolysaccharide stimulation of chondrocytes, indicating a possible involvement in acute phase response. Raising specific antibodies in a rabbit allowed validating, at the protein level, all the transcriptional data. Moreover, we gained evidence that the protein is actively secreted in the extracellular matrix surrounding the chondrocytes. Because of its peculiar expression in cartilage, this new protein was named chondrogenesis-associated lipocalin beta (thereafter referred to as CAL beta). The close similarity between Ex-FABP and CAL beta expression patterns supports the hypothesis of a genomic organisation in a cluster where both genes could be co-ordinately regulated.