Achondroplasia (ACH) and thanatophoric dysplasia (TD) are human skeletal disorders of increasing severity accounted for by mutations in the fibroblast growth factor receptor 3 (FGFR3). Attempts to elucidate the molecular signaling pathways leading to these phenotypes through mouse model engineering have provided relevant information mostly in the postnatal period. The availability of a large series of human fetuses including 14 ACH and 26 TD enabled the consequences of FGFR3 mutations on endogenous receptor expression during the prenatal period to be assessed by analysis of primary cultured chondrocytes and cartilage growth plates. Overexpression and ligand-independent phosphorylation of the fully glycosylated isoform of FGFR3 were observed in ACH and TD cells. Immunohistochemical analysis of fetal growth plates showed a phenotype-related reduction of the collagen type X-positive hypertrophic zone. Abnormally high amounts of Stat1, Stat5 and p21^Cip1 proteins were found in prehypertrophic–hypertrophic chondrocytes, the extent of overexpression being directly related to the severity of the disease. Double immunostaining procedures revealed an overlap of FGFR3 and Stat1 expression in the prehypertrophic–hypertrophic zone, suggesting that constitutive activation of the receptor accounts for Stat overexpression. By contrast, expression of Stat and p21^Cip1 proteins in the proliferative zone differed only slightly from control cartilage and differences were restricted to the last arrays of proliferative cells. Our results indicate that FGFR3 mutations in the prenatal period upregulate FGFR3 and Stat–p21^Cip1 expression, thus inducing premature exit of proliferative cells from the cell cycle and their differentiation into prehypertrophic chondrocytes. We conclude that defective differentiation of chondrocytes is the main cause of longitudinal bone growth retardation in FGFR3-related human chondrodysplasias.