In hypertrophic chondrocytes, β-catenin has two roles. First, it locally suppresses the differentiation of osteoclasts at the chondroosseous junction by maintaining the pro-osteoclastic factor receptor activator of NF-κB ligand (RANKL) at low levels. Second, it promotes the differentiation of osteoblast-precursors from chondrocytes. Yet, β-catenin is a dual-function protein, which can either participate in cell-cell adherens junctions or serve as a transcriptional co-activator in canonical Wnt signaling interacting with T-cell factor/lymphoid enhancer-binding factor (TCF/LEF) transcription factors. Hence, whenever studying tissue-specific requirements of β-catenin using a conventional conditional knockout approach, the functional mechanisms underlying the defects in the conditional mutants remain ambiguous. To decipher mechanistically which of the two molecular functions of β-catenin is required in hypertrophic chondrocytes, we used different approaches. We analyzed the long bones of newborn mice carrying either the null-alleles of Lef1 or Tcf7, or mice in which Tcf7l2 was conditionally deleted in the hypertrophic chondrocytes, as well as double mutants for Lef1 and Tcf7l2, and Tcf7 and Tcf7l2. Furthermore, we analyzed Ctnnb1 mutant newborns expressing a signaling-defective allele that retains the cell adhesion function in hypertrophic chondrocytes. None of the analyzed Tcf/Lef single or double mutants recapitulated the previously published phenotype upon loss of β-catenin in hypertrophic chondrocytes. However, using this particular Ctnnb1 allele, maintaining cell adhesion function, we show that it is the co-transcriptional activity of β-catenin, which is required in hypertrophic chondrocytes to suppress osteoclastogenesis and to promote chondrocyte-derived osteoblast differentiation.