Collagenase-3 (MMP13), a member of the matrix metalloproteinase (MMP) family of neutral endopeptidases, is expressed in the skeleton during embryonic development and is highly overexpressed in human carcinomas and in chondrocytes and synovial cells in rheumatoid arthritis and osteoarthritis. To determine the functional roles of Mmp13, we generated Mmp13-null mice that showed profound defects in growth plate cartilage with markedly increased hypertrophic domains as well as delay in endochondral ossification and formation and vascularization of primary ossification centers. Absence of Mmp13 resulted in significant interstitial collagen accumulation due, in part, to the lack of appropriate collagenase-mediated cleavage that normally occurs in growth plates and primary ossification centers. Cartilaginous growth plate abnormalities persisted in adult mice and phenocopied defects observed in human hereditary chondrodysplasias. Our findings demonstrate a unique role of Mmp13 in skeletal development.