Chondrogenesis results in the formation of cartilages, initial skeletal elements that can serve as templates for endochondral bone formation. Cartilage formation begins with the condensation of mesenchyme cells followed by their differentiation into chondrocytes. Although much is known about the terminal differentiation products that are expressed by chondrocytes 1, 2, 3, little is known about the factors that specify the chondrocyte lineage 4, 5, 6. SOX9 is a high-mobility-group (HMG) domain transcription factor that is expressed in chondrocytes and other tissues 7, 8, 9, 10, 11, 12. In humans, SOX9 haploinsufficiency results in campomelic dysplasia, a lethal skeletal malformation syndrome, and XY sex reversal 7, 13, 14, 15, 16. During embryogenesis, Sox9 is expressed in all cartilage primordia and cartilages, coincident with the expression of the collagen α1 (II) gene (Col2a1; refs 8, 11, 12). Sox9 is also expressed in other tissues, including the central nervous and urogenital systems 8, 9, 10, 11, 12. Sox9 binds to essential sequences in the Col2a1 and collagen α2 (XI) gene (Col11a2) chondrocyte-specific enhancers and can activate these enhancers in non-chondrocytic cells 17, 18, 19. Here, Sox9 is identified as a regulator of the chondrocyte lineage. In mouse chimaeras, Sox9-/-cells are excluded from all cartilages but are present as a juxtaposed mesenchyme that does not express the chondrocyte-specific markers Col2a1, Col9a2, Col11a2 and Agc. This exclusion occurred cell autonomously at the condensing mesenchyme stage of chondrogenesis. Moreover, no cartilage developed in teratomas derived from Sox9-/-embryonic stem (ES) cells. Our results identify Sox9 as the first transcription factor that is essential for chondrocyte differentiation and cartilage formation.