Recent reports on the Pond-Nuki model of osteoarthritis in the dog have provided evidence for partial disruption of the collagen network. The possibility of collagenase involvement in these localized changes was studied. Animals were killed 2, 4, 8, and 12 weeks after surgery. The left knee served as a sham-operated control. Cartilages from femoral condyles were processed for light and electron microscopy and assayed for collagenolytic activity by a direct tissue assay, based on the measurement of digestion of endogenous cartilage collagen. Animals killed at 2 and 4 weeks showed fibrillation and mild erosion of femoral condyles, which usually progressed to ulceration by 8 and 12 weeks. Electron microscopy demonstrated fiber disruption of the mid-zone perilacunar collagen as early as 2 weeks after the operation. Total collagenolytic activity, measured after activation by aminophenylmercuric acetate, was significantly higher in decreased cartilage than in controls of 2, 4, and 8 weeks; the peak value was at 4 weeks. Collagenase was shown, by its specific action on type I collagen, to be present at 2 and 4 weeks; however, other metalloproteases may also contribute to the digestion. The correlation between increased collagenolytic activity and the early osteoarthritic changes in cartilage suggests a role of this enzyme activity in the disease process.