The importance of estrogens for the regulation of longitudinal bone growth is unequivocal. However, any local effect of estrogens in growth plate cartilage has been debated. Recently, several enzymes essential for estrogen synthesis were shown to be expressed in rat growth plate chondrocytes. Local production of 17β-estradiol (E2) has also been demonstrated in rat costal chondrocytes. We aimed to determine the functional role of locally produced estrogen in growth plate cartilage. The human chondrocyte-like cell line HCS-2/8 was used to study estrogen effects on cell proliferation (3H-labeled thymidine uptake) and apoptosis (cell death detection ELISA kit). Chondrocyte production of E2 was measured by RIA and organ cultures of fetal rat metatarsal bones were used to study the effects of estrogen on longitudinal growth rate. We found that significant amounts of E2 were produced by HCS-2/8 chondrocytes (64.1 ± 5.3 fmol/3 days/106cells). The aromatase inhibitor letrozole (1 μM) and the pure estrogen receptor antagonist ICI 182,780 (10 μM) inhibited proliferation of HCS-2/8 chondrocytes by 20% (P<0.01) and almost 50% (P<0.001), respectively. Treatment with ICI 182,780 (10 μM) increased apoptosis by 228% (P<0.05). Co-treatment with either caspase-3 or pan-caspase inhibitors completely blocked ICI 182,780-induced apoptosis (P<0.001 vs ICI 182,780 only). Moreover, both ICI 182,780 (10 μM) and letrozole (1 μM) decreased longitudinal growth of fetal rat metatarsal bones after 7 days of culture (P<0.01). In conclusion, our data clearly show that chondrocytes endogenously produce E2 and that locally produced estrogen stimulates chondrocyte proliferation and protects from spontaneous apoptosis. In addition, longitudinal growth is promoted by estrogens locally produced within the epiphyseal growth plate.