The lung is rich in atrial natriuretic peptide binding sites, and the majority of them are considered to be the natriuretic peptide clearance receptor (NPR-C). In this study, localization of NPR-C in the rat lung and trachea was investigated by immunohistochemical analysis with the specific antibody. Positive staining was observed in the epithelial cell layers of the trachea and bronchiole and the myocardium surrounding the pulmonary vein. Moreover, expression of NPR-C was seen in mesenchymal cells; it was especially strong in cells in the perichondrium and decreased in chondrocytes in the cartilage. Because mesenchymal cells in the perichondrium differentiate to chondrocytes, NPR-C expression is suggested to be associated with chondrogenic differentiation. The chondrogenic cell line ATDC5 was used to study NPR-C expression during chondrogenic differentiation in vitro. The undifferentiated ATDC5 cells expressed NPR-C at a much higher level than the differentiated ATDC5 cells, in accordance with the observation of the immunohistochemical analysis in the cartilage. These findings suggest that NPR-C expression is differentially regulated in chondrocytes and that the natriuretic peptides may play a role in regulating chondrocyte development in the lung.