The neu-related lipocalin (NRL) is a protein overexpressed in rat mammary cancer induced by activated neu (HER-2/c-erbB2). This protein belongs to the family of the lipocalins or low molecular weight proteins able to bind and transport small hydrophobic molecules. The NRL homologue in mouse is SIP24, an acute phase protein induced in the animal by turpentine injection; the human homologous protein is NGAL expressed in granulocytes and epithelial cells in pathological conditions, such as inflammation and malignancy. We have investigated NRL expression in developing rat embryos. By immunolocalization we have shown localization of the protein in the hypertrophic region of growth plate cartilage. NRL was particularly enriched in prehypertrophic chondrocytes. In addition, we observed localization of the protein in forming skeletal muscle fibres and in the myocardium of developing heart. In agreement with the immunolocalization data, by in situ hybridization we have demonstrated the presence of the specific mRNA in the same tissues. At an early stage of differentiation, cultured rat embryo-derived chondrocytes did not express NRL; nevertheless expression of the protein was induced in these cells by treatment with an inflammatory agent, such as LPS. By Western blot analysis with specific antibodies we showed protein synthesis by cultured myoblasts also in the absence of LPS treatment, but only when forming myotubes were observed in culture. Stimulation of myoblast cultures with LPS resulted in an enhancement of the NRL expression in well formed myotubes. Our data suggest a role of NRL in cartilage and muscle differentiation. NRL expression was induced by inflammatory agents. We wish to propose that the expression of NRL in hypertrophic chondrocytes and forming myotubes is part of a "physiological" acute phase response occurring during cartilage and muscle development. In this manuscript we also report that NRL is not detectable by immunolocalization in adult cartilage (both articular and tracheal) from normal subjects. On the contrary articular cartilage from osteoarthritic patients was highly positive for the presence of NRL/NGAL. Interestingly the expression of this protein is also activated during neoplastic transformation of chondrogenic lineage cells.