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Cartilage formation is driven by mesenchymal chondroprogenitor cells (MCCs) that proliferate and differentiate into chondrocytes. The molecular mechanisms by which growth factors regulate MCC fate are not well defined. Insulin-like growth factor binding protein-3 (IGFBP-3) has intrinsic bioactivity that is independent of IGF binding. We previously reported that IGFBP-3 has IGF-independent antiproliferative and apoptotic effects in MCCs, and requires STAT-1 activation to mediate its apoptotic effect. Transforming growth factor-beta (TGF-beta) is a key chondroinductive growth factor. The objective of the study is to define the interactions between IGFBP-3 and TGF-beta in MCC growth and their intracellular signaling pathways. We used the RCJ3*1C5*18 mesenchymal chondrogenic cells that without biochemical or oncogenic transformation progress in culture from MCCs to differentiated chondrocytes. Cell proliferation was assessed in MCCs treated with IGFBP-3 or transfected with IGFBP-3, in the presence or absence of TGF-beta. To demonstrate that IGFBP-3 effects were IGF-independent an IGFBP-3 analog that lacks IGF binding was used (GGG-IGFBP-3). To determine the functional roles of the TGF-beta-mediated signaling and the STAT-1 pathway, cells were either stably transfected with a dominant negative TGF-beta type II receptor (MCC-DNTbetaRII) or treated with a STAT-1 morpholino antisense oligonucleotide. We found that in MCCs, TGF-beta antagonized the antiproliferative effect of IGFBP-3. IGFBP-3 increased the cyclin-dependent kinase inhibitor p21 expression and this effect was abolished by TGF-beta. Furthermore, TGF-beta inhibited STAT-1 phosphorylation induced by IGFBP-3. Similarly to TGF-beta, STAT-1 antisense oligonucleotide inhibited the IGFBP-3 antiproliferative action. Although TGF-beta in MCC-DNTbetaRII lacked Smad-mediated signaling, it persistently antagonized the IGFBP-3 antiproliferative action. However, TGF-beta even in MCC-DNTbetaRII cells induced ERK1/2 phosphorylation, and treatment with MEK inhibitor, UO126, inhibited the antagonistic effects of TGF-beta on IGFBP-3. Furthermore, UO126 blocked the TGF-beta inhibition of STAT-1 phosphorylation induced by IGFBP-3. Collectively, these results demonstrate cross-talk between the IGFBP-3-dependent STAT-1 signaling and the TGF-beta-dependent ERK pathway that regulates MCC proliferation.