Here we report a new role for the small GTPase RhoC in the control of limb chondrogenesis. Expression of rhoC is a precocious marker of the zeugopodial and digit blastemas and is induced by treatments with TGFbetas preceding the formation of ectopic digits. As development progresses, expression of rhoC outlines the growing distal tip of the digits, and marks the regions of interphalangeal joint formation. Functional experiments show that RhoC is a negative regulator of chondrogenesis, which controls digit outgrowth and joint segmentation. These functions appear to be mediated by reorganization of the actin cytoskeleton and modification of the adhesive properties of the mesenchymal cells.