During skeletogenesis, cartilage develops to either permanent cartilage that persists through life or transient cartilage that is eventually replaced by bone. However, the mechanism by which cartilage phenotype is specified remains unclarified. Core binding factor α1 (Cbfa1) is an essential transcription factor for osteoblast differentiation and bone formation and has the ability to stimulate chondrocyte maturation in vitro. To understand the roles of Cbfa1 in chondrocytes during skeletal development, we generated transgenic mice that overexpress Cbfa1 or a dominant negative (DN)-Cbfa1 in chondrocytes under the control of a type II collagen promoter/enhancer. Both types of transgenic mice displayed dwarfism and skeletal malformations, which, however, resulted from opposite cellular phenotypes. Cbfa1 overexpression caused acceleration of endochondral ossification due to precocious chondrocyte maturation, whereas overexpression of DN-Cbfa1 suppressed maturation and delayed endochondral ossification. In addition, Cbfa1 transgenic mice failed to form most of their joints and permanent cartilage entered the endochondral pathway, whereas most chondrocytes in DN-Cbfa1 transgenic mice retained a marker for permanent cartilage. These data show that temporally and spatially regulated expression of Cbfa1 in chondrocytes is required for skeletogenesis, including formation of joints, permanent cartilages, and endochondral bones.