Chondrogenesis is the earliest phase of skeletal development, involving mesenchymal cell recruitment and migration, condensation of progenitors, and chondrocyte differentiation, and maturation and resulting in the formation of cartilage and bone during endochondral ossification. This process is controlled exquisitely by cellular interactions with the surrounding matrix, growth and differentiation factors, and other environmental factors that initiate or suppress cellular signaling pathways and transcription of specific genes in a temporal-spatial manner. Vertebrate limb development is controlled by interacting patterning systems involving prominently the fibroblast growth factor (FGF), bone morphogenetic protein (BMP), and hedgehog pathways. Both positive and negative signaling kinases and transcription factors, such as Sox9 and Runx2, and interactions among them determine whether the differentiated chondrocytes remain within cartilage elements in articular joints or undergo hypertrophic maturation prior to ossification. The latter process requires extracellular matrix remodeling and vascularization controlled by mechanisms that are not understood completely. Recent work has revealed novel roles for mediators such as GADD45beta, transcription factors of the Dlx, bHLH, leucine zipper, and AP-1 families, and the Wnt/beta-catenin pathway that interact at different stages during chondrogenesis.