Articular chondrocytes are slowly dividing cells that tend to lose their cell type-specific phenotype and ability to produce structurally and functionally correct cartilage tissue when cultured. Thus, culture conditions, which enhance the maintenance of chondrocyte phenotype would be very useful for cartilage research. Here we show that Rho-kinase inhibition by Y-27632 under hypoxic conditions efficiently maintains and even enhances chondrocyte-specific extracellular matrix production by chondrocytic cells. The effects of long-term Y-27632 exposure to human chondrosarcoma 2/8 cell phenotype maintenance and extracellular matrix production were studied at normoxia and at a 5% low oxygen atmosphere. Y-27632 treatment at normoxia induced ACAN and COL2A1 gene up-regulation and a minor increase of sulfated glycosaminoglycans (sGAGs), while type II collagen expression was not significantly up-regulated. A further increase in expression of ACAN and COL2A1 was achieved with Y-27632 treatment and hypoxia. The production of sGAGs increased by 65.8%, and ELISA analysis revealed a 6-fold up-regulation of type II collagen. Y-27632 also induced the up-regulation of S100-A1 and S100-B proteins and modified the expression of several other S100 protein family members, such as S100-A4, S100-A6, S100-A13 and S100-A16. The up-regulation of S100-A1 and S100-B proteins is suggested to enhance the chondrocytic phenotype of these cells.