GADD45 (growth arrest-and DNA damage-inducible) interacts with upstream regulators of the JNK and p38 stress response kinases. Previously, we reported that the hypertrophic zone of the Gadd45 ؊/؊ mouse embryonic growth plate is compressed, and expression of type X collagen (Col10a1) and matrix metalloproteinase 13 (Mmp13) genes is decreased. Herein, we report that GADD45 enhances activity of the proximal Col10a1 promoter, which contains evolutionarily conserved AP-1, cAMP-response element, and C/EBP half-sites, in synergism with C/EBP family members, whereas the MMP13 promoter responds to GADD45 together with AP-1, ATF, or C/EBP family members. C/EBP expression also predominantly co-localizes with GADD45 in the embryonic growth plate. Moreover, GADD45 enhances C/EBP activation via MTK1, MKK3, and MKK6, and dominant-negative p38␣apf, but not JNKapf, disrupts the combined trans-activating effect of GADD45 and C/EBP on the Col10a1 promoter. Importantly, GADD45 knockdown prevents p38 phosphorylation while decreasing Col10a1 mRNA levels but does not affect C/EBP binding to the Col10a1 promoter in vivo, indicating that GADD45 influences the transactivation function of DNA-bound C/EBP. In support of this conclusion, we show that the evolutionarily conserved TAD4 domain of C/EBP is the target of the GADD45-dependent signaling. Collectively, we have uncovered a novel molecular mechanism linking GADD45 via the MTK1/MKK3/6/p38 axis to C/EBP-TAD4 activation of Col10a1 transcription in terminally differentiating chondrocytes.