Whether growth hormone stimulates longitudinal bone growth by a direct effect at the site of the growth plate or indirectly by increasing the concentration of circulating somatomedins (insulin-like growth factors) has been the subject of controversy. Immunohistochemical methods were used to explore the localization and distribution of insulin-like growth factor I (IGF-I) immunoreactivity in the epiphyseal growth plate of the proximal tibia of male rats. Cells in the proliferative zone of the growth plate of normal rats exhibited a bright immunofluorescence, whereas cells in the germinal and hypertrophic zones stained only weakly. In rats subjected to hypophysectomy, the number of fluorescent cells was markedly reduced. When the hypophysectomized rats were treated with growth hormone, either systemically or at the site of the growth plate, the number of IGF-I-immunoreactive cells in the proliferative zone was increased. The results show that IGF-I is produced in proliferative chondrocytes in the growth plate and that the number of IGF-I-containing cells is directly regulated by growth hormone. These findings suggest that IGF-I has a specific role in the clonal expansion of differentiated chondrocytes and exerts its function locally through autocrine or paracrine mechanisms.