We describe a ‘reactor–diffusion’ mechanism for precartilage condensation based on recent experiments on chondrogenesis in the early vertebrate limb and additional hypotheses. Cellular differentiation of mesenchymal cells into subtypes with different fibroblast growth factor (FGF) receptors occurs in the presence of spatio–temporal variations of FGFs and transforming growth factor–betas (TGF–βs). One class of differentiated cells produces elevated quantities of the extracellular matrix protein fibronectin, which initiates adhesion–mediated preskeletal mesenchymal condensation. The same class of cells also produces an FGF–dependent laterally acting inhibitor that keeps condensations from expanding beyond a critical size. We show that this ‘reactor–diffusion’ mechanism leads naturally to patterning consistent with skeletal form, and describe simulations of spatio–temporal distribution of these differentiated cell types and the TGF–β and inhibitor concentrations in the developing limb bud.