gonzo (goz) is a zebrafish mutant with defects in cartilage formation. The goz phenotype comprises cartilage matrix defects and irregular chondrocyte morphology. Expression of endoderm, mesoderm, and cartilage marker genes is, however, normal, indicating a defect in chondrocyte morphogenesis. The mutated gene responsible for the goz phenotype, identified by positional cloning and confirmed by phosphomorpholino knockdown, encodes zebrafish site-1 protease (s1p). S1P has been shown to process and activate sterol regulatory element-binding proteins (SREBPs), which regulate expression of key enzymes of lipid biosynthesis or transport. This finding is consistent with the abnormal distribution of lipids in goz embryos. Knockdown of site-2 protease, which is also involved in activation of SREBPs, results in similar lipid and cartilage phenotypes as S1P knockdown. However, knockdown of SREBP cleavage-activating protein, which forms a complex with SREBP and is essential for S1P cleavage, results only in lipid phenotypes, whereas cartilage appears normal. This indicates that the cartilage phenoptypes of goz are caused independently of the lipid defects.