The extracellular matrix (ECM) is an intricate network of proteins that surrounds cells and has a central role in establishing an environment that is conducive to tissue-specific cell functions. In the case of stem cells, this environment is the stem cell niche, where ECM signals participate in cell fate decisions. In this Commentary, we describe how changes in ECM composition and mechanical properties can affect cell shape and stem cell differentiation. Using chondrogenic differentiation as a model, we examine the changes in the ECM that occur before and during mesenchymal stem cell differentiation. In particular, we focus on the main ECM protein fibronectin, its temporal expression pattern during chondrogenic differentiation, its potential effects on functions of differentiating chondrocytes, and how its interactions with other ECM components might affect cartilage development. Finally, we discuss data that support the possibility that the fibronectin matrix has an instructive role in directing cells through the condensation, proliferation and/or differentiation stages of cartilage formation.