Runx2/Cbfa1 plays a central role in skeletal development as demonstrated by the absence of osteoblasts/bone in mice with inactivated Runx2/Cbfa1 alleles. To further investigate the role of Runx2 in cartilage differentiation and to assess the potential of Runx2 to induce bone formation, we cloned chicken Runx2 and overexpressed it in chick embryos using a retroviral system. Infected chick wings showed multiple phenotypes consisting of (1) joint fusions, (2) expansion of carpal elements, and (3) shortening of skeletal elements. In contrast, bone formation was not affected. To investigate the function of Runx2/Cbfa1 during cartilage development, we have generated transgenic mice that express a dominant negative form of Runx2 in cartilage. The selective inactivation of Runx2 in chondrocytes results in a severe shortening of the limbs due to a disturbance in chondrocyte differentiation, vascular invasion, osteoclast differentiation, and periosteal bone formation. Analysis of the growth plates in transgenic mice and in chick limbs shows that Runx2 is a positive regulator of chondrocyte differentiation and vascular invasion. The results further indicate that Runx2 promotes chondrogenesis either by maintaining or by initiating early chondrocyte differentiation. Furthermore, Runx2 is essential but not sufficient to induce osteoblast differentiation. To analyze the role of runx genes in skeletal development, we performed in situ hybridization with Runx2- and Runx3-specific probes. Both genes were coexpressed in cartilaginous condensations, indicating a cooperative role in the regulation of early chondrocyte differentiation and thus explaining the expansion/maintenance of cartilage in the carpus and joints of infected chick limbs.