During the course of a study aimed at isolating transcripts specifically or preferentially expressed in the inner ear, we identified a novel gene, encoding a fibrocyte-derived protein, that we named Fdp. Fdp is predicted to be a secreted 128-amino acid protein, which is highly homologous to the melanoma-inhibiting activity/cartilage-derived retinoic acid-sensitive protein (MIA/CD-RAP), a cartilage-specific protein also expressed in several tumors. Fdp and MIA/CD-RAP thus define a new family of proteins. Fdp is expressed from embryonic day 10.5 in the mesenchyme surrounding the otic epithelium. During development, these cells progressively aggregate, condense, and differentiate into cartilaginous cells forming the otic capsule, which no longer expresses Fdp, and into fibrocytes surrounding the epithelia, which strongly express Fdp. In order to address the function of Fdp, we developed an in vitro antisense oligonucleotide approach using microdissected periotic mesenchyme micromass cultures, and showed that Fdp antisense oligonucleotide treatment results in a significant reduction in chondrogenesis. Our results demonstrate that Fdp plays a role in the initiation of periotic mesenchyme chondrogenesis. Accordingly, Fdp and its human ortholog FDP, which map to chromosome 2 and band 20p11, respectively, could be candidate genes for forms of deafness associated with malformations of the otic capsule.