Cbfa1, a transcription factor that belongs to the runt‐domain gene family, plays an essential role in osteogenesis. Cbfa1‐deficient mice completely lacked both intramembranous and endochondral ossification, owing to the maturational arrest of osteoblasts, indicating that Cbfa1 has a fundamental role in osteoblast differentiation. However, Cbfa1 was also expressed in chondrocytes, and its expression was increased according to the maturation of chondrocytes. Terminal hypertrophic chondrocytes expressed Cbfa1 extensively. The significant expression of Cbfa1 in hypertrophic chondrocytes was first detected at embryonic day 13.5 (E13.5), and its expression in hypertrophic chondrocytes was most prominent at E14.5–16.5. In Cbfa1‐deficient mice, whose entire skeleton was composed of cartilage, the chondrocyte differentiation was disturbed. Calcification of cartilage occurred in the restricted parts of skeletons, including tibia, fibula, radius, and ulna. Type X collagen, BMP6, and Indian hedgehog were expressed in their hypertrophic chondrocytes. However, osteopontin, bone sialoprotein, and collagenase 3 were not expressed at all, indicating that they are directly regulated by Cbfa1 in the terminal hypertrophic chondrocytes. Chondrocyte differentiation was severely disturbed in the rest of the skeleton. The expression of PTH/PTHrP receptor, Indian hedgehog, type X collagen, and BMP6 was not detected in humerus and femur, indicating that chondrocyte differentiation was blocked before prehypertrophic chondrocytes. These findings demonstrate that Cbfa1 is an important factor for chondrocyte differentiation. Dev Dyn 1999;214:279–290. © 1999 Wiley‐Liss, Inc.