With the goal of identifying master transcription factors that control the genetic program of differentiation of mesenchymal cells into chondrocytes, we first delineated a 48-bp chondrocyte-specific enhancer element in the gene for proα1(II) collagen (Col2a1), an early and abundant marker of chondrocytes. Our experiments have demonstrated that the HMG-box-containing transcription factor, Sox9 which binds and activates this enhancer element, is required for chondrocyte differentiation and for expression of a series of chondrocyte-specific marker genes including Col2a1, Col9a2, Col11a2 and Aggrecan. In the absence of Sox9 the block in differentiation occurs at the stage of mesenchymal condensation, suggesting the hypothesis that Sox9 might also control expression of cell surface proteins needed for mesenchymal condensation. Since Sox9 also contains a potent transcription activation domain, it is a typical transcription factor. Two other members of the Sox family, L-Sox5 and Sox6, also bind to the 48-bp Col2a1 enhancer and together with Sox9 activate this enhancer as well as the endogenous Col2a1 and aggrecan genes. L-Sox5 and Sox6 have a high degree of sequence identity to each other and are likely to have redundant functions. Except for the HMG-box, L-Sox5 and Sox6 have no similarity to Sox9 and, hence, are likely to have a complementary function to that of Sox9. Our experiments suggest the hypothesis that, like Sox9, Sox5 and Sox6 might also be needed for chondrocyte differentiation. Other experiments, have provided evidence that the Sox9 polypeptide and the Sox9 gene are targets of signaling molecules that are known to control discrete steps of chondrogenesis in the growth plate of endochondral bones. Protein kinase A (PKA) phosphorylation of Sox9 increases its DNA binding and transcriptional activity. Since PKA-phosphorylated-Sox9 is found in the prehypertrophic zone of the growth plate, the same location where the gene for the receptor of the parathyroid hormone-related peptide (PTHrP) is expressed and since PTHrP signaling is mediated by cyclic AMP, we have hypothesized that Sox9 is a target for PTHrP signaling. Other experiments have also shown that fibroblast growth factors (FGFs) increase the expression of Sox9 in chondrocytes in culture and that this activation is mediated by the mitogen-activated protein kinase pathway. These results favor the hypothesis that in achondroplasia, a disease caused by activating mutations in FGF receptor 3, there might also be an abnormally high Sox9 expression.