Background Pathogenic mutations in WRN are a cause of premature aging disease Werner syndrome (WS). Besides accelerated aging phenotypes and cancer predisposition, patients with WS also display underdevelopment in the skeletal system, characterized by short stature, light body weight and unusually thin extremities. The reasons for these developmental defects are not completely understood and the underlying molecular mechanism remains to be elucidated. Results In this study, WRN was found to modulate transcription of short stature homeobox gene SHOX. Loss of WRN resulted in insufficient expression of SHOX, the gene dose of which is critical for driving chondrocyte differentiation. WRN could bind the G-quadruplex (G4) structures in the SHOX promoter and stimulate transcription. Aberrant formation of G4 structures in WRN-deficient cells impeded normal transcription of SHOX, thus resulting in impaired chondrogenesis. Chondrogenesis could be rescued by overexpression of WRN helicase or SHOX, suggesting that SHOX is a downstream target of WRN. Gene editing of the G4 structures in the SHOX promoter could increase SHOX expression, therefore rescuing the impaired chondrogenesis in WRN-deficient cells. Conclusions Our data suggest that dysgenesis of the developing bone in WS might be caused by SHOX insufficiency. Aberrant formation of G4 structures in SHOX promoter suppresses SHOX expression and impairs chondrogenesis. Targeted mutagenesis in the G4 structures enhances SHOX expression and thus providing an opportunity to rescue the chondrogenic defect.