Mesenchymal stem cell differentiation is controlled by the cooperative activity of a network of signaling mechanisms. Among these, RUNX2 and SOX9 are the major transcription factors for osteogenesis and chondrogenesis, respectively. Their expression is overlapped both temporally and spatially during embryogenesis. Here we have demonstrated that RUNX2 and SOX9 physically interact in intact cells and have confirmed that SOX9 can inhibit the transactivation of RUNX2. In addition, RUNX2 exerts reciprocal inhibition on SOX9 transactivity. In analyses of the mechanism by which SOX9 regulated RUNX2 function, we demonstrated that SOX9 induced a dosedependent degradation of RUNX2. Although RUNX2 is normally degraded by the ubiquitin-proteasome pathway, we found that SOX9-mediated degradation was proteasome-independent but phosphorylation-dependent and required the presence of the RUNX2 Cterminal domain, which contains a nuclear matrix targeting sequence (NMTS). Furthermore, SOX9 was able to decrease the level of ubiquitinated RUNX2 and direct RUNX2 to the lysosome for degradation. SOX9 also preferentially directed b-catenin, an intracellular mediator of canonical Wnt signaling, for lysosomal breakdown. Consequently, the mechanisms by which SOX9 regulates RUNX2 function may underlie broader signaling pathways that can influence osteochondrogenesis and mesenchymal fate. ß