Altered chondrocyte differentiation, including development of chondrocyte hypertrophy, mediates osteoarthritis and pathologic articular cartilage matrix calcification. Similar changes in endochondral chondrocyte differentiation are essential for physiologic growth plate mineralization. In both articular and growth plate cartilages, chondrocyte hypertrophy is associated with up-regulated expression of certain protein-crosslinking enzymes (transglutaminases (TGs)) including the unique dualfunctioning TG and GTPase TG2. Here, we tested if TG2 directly mediates the development of chondrocyte hypertrophic differentiation. To do so, we employed normal bovine chondrocytes and mouse knee chondrocytes from recently described TG2 knockout mice, which are phenotypically normal. We treated chondrocytes with the osteoarthritis mediator IL-1â€, with the all-trans form of retinoic acid (ATRA), which promotes endochondral chondrocyte hypertrophy and pathologic calcification, and with C-type natriuretic peptide, an essential factor in endochondral development. IL-1†and ATRA induced TG transamidation activity and calcification in wild-type but not in TG2 (Ű/Ű) mouse knee chondrocytes. In addition, ATRA induced multiple features of hypertrophic differentiation (including type X collagen, alkaline phosphatase, and MMP-13), and these effects required TG2. Significantly, TG2 (Ű/Ű) chondrocytes lost the capacity for ATRA-induced expression of Cbfa1, a transcription factor necessary for ATRA-induced chondrocyte hypertrophy. Finally, C-type natriuretic peptide, which did not modulate TG activity, comparably promoted Cbfa1 expression and hypertrophy (without associated calcification) in TG2 (Ű/Ű) and TG2 (Ű/Ű) chondrocytes. Thus, distinct TG2-independent and TG2-dependent mechanisms promote Cbfa1 expression, articular chondrocyte hypertrophy, and calcification. TG2 is a potential site for intervention in pathologic calcification promoted by IL-1†and ATRA.In physiologic endochondral growth plate mineralization, chondrocytes undergo a multi-step differentiation process in which there is ordered progression from a resting to proliferative state followed by maturation to a terminally differentiated hypertrophic state (1). Hypertrophic chondrocytes are specialized to remodel and mineralize their matrix (2). For example, hypertrophic chondrocytes demonstrate up-regulated expression of MMP-13, a mediator of matrix degradation in osteoarthritis (OA) 1 (3). In addition, hypertrophic chondrocytes demonstrate altered patterns of collagen subtype generation that include stereotypic up-regulated type X collagen expression, and hypertrophic chondrocytes show markedly increased release of mineralization-competent secretory vesicles (2). In addition, hypertrophic chondrocytes demonstrate increased alkaline phosphatase (AP) activity and other alterations in the metabolism of P i and PP i (4, 6). In this context, P i and PP i mediate both calcification and growth plate organization (5), and P i promotes chondrocyte hypertrophy (6).In contrast to chondroc...