The latent transforming growth factor (TGF)-beta binding proteins (LTBP)-1, -3 and -4 bind the latent form of the multipotent cytokine TGF-beta. To examine the function of the LTBPs, we made a null mutation of Ltbp-3 by gene targeting. The homozygous mutant animals developed cranio-facial malformations by 12 days. By three months, there was a pronounced rounding of the cranial vault, extension of the mandible beyond the maxilla, and kyphosis. The mutant animals developed osteosclerosis of the long bones and vertebrae as well as osteoarthritis between 6 and 9 months of age. These latter phenotypic changes were similar to those described for mice that have impaired TGF-beta signaling. Thus, we suggest that Ltbp-3 plays an important role in regulating TGF-beta bioavailability as the phenotype of the Ltbp-3 null mouse appears to result from decreased TGF-beta signaling. Histological examination of the skulls from null animals revealed no effects on calvarial suture closure. However, the synchondroses in the skull base were obliterated within 2 weeks of birth. This is in contrast to the wild-type synchondroses, which remain unossified throughout the life of the animal and enable growth of the skull base through endochondral ossification. Histological changes in mutant basooccipital-basosphenoid synchondrosis were observed 1.5 days after birth. Compared with wild-type or heterozygous littermates, the basooccipital-basosphenoid synchondrosis of Ltbp-3 null mice contained increased numbers of hypertrophic chondrocytes. The expression of bone sialoprotein-1 (a marker for osteoblasts) was observed in cells surrounding the synchondrosis at postnatal day 1.5 indicating ectopic ossification. The expression of Indian hedgehog (Ihh) (a marker for chondrocytes committed to hypertrophic differentiation) was found through the basooccipital-basosphenoid synchondrosis, whereas the expression of parathyroid hormone related protein (PTHrP), which inhibits chondrocyte differentiation, appeared to be diminished in Ltbp-3 null mice. This suggests that Ltbp-3 may control chondrocyte differentiation by regulating TGF-beta availability. TGF-beta may regulate PTHrP expression either downstream of Ihh or independently of Ihh signaling.