Endochondral bone formation is one of the most extensively examined developmental sequences within vertebrates. This process involves the coordinated temporal/spatial differentiation of three separate tissues (cartilage, bone, and the vasculature) into a variety of complex structures. The differentiation of chondrocytes during this process is characterized by a progressive morphological change associated with the eventual hypertrophy of these cells. These cellular morphological changes are coordinated with proliferation, a columnar orientation of the cells, and the expression of unique phenotypic properties including type X collagen, high levels of bone, liver, and kidney alkaline phosphatase, and mineralization of the cartilage matrix. Several studies indicate that hypertrophic chondrocytes also express osteocalcin, osteopontin, and bone sialoprotein, three proteins which until very recently were widely believed to be restricted in their expression to osteoblasts. Recent studies suggest that the hypertrophic chondrocytes are regulated by the calcitropic hormones, morphogenic steroids, and local tissue factors. These considerations are based on the regulation by 1,25 (OH)2D3 and retinoids of the cartilage specific genes as well as osteopontin and osteocalcin expression in hypertrophic chondrocytes. They are also based on the effects on growth plate development caused by 1) transgenic ablation of autocrine/paracrine regulators such as PTHrP and of the transcriptional regulator c-fos and 2) naturally occurring genetic mutations of the FGF receptor. These studies further suggest that specific transcriptional factors mediate exogenous regulatory signals in a coordinated manner with the development of bone. While it has been widely demonstrated that the majority of hypertrophic chondrocytes undergo apoptosis during terminal stages of the developmental sequence, their response to specific exogenous regulatory signals and their expression of bone-specific proteins give rise to questions about whether all growth chondrocytes have the same developmental fates and have identical functions. Furthermore, specific questions arise as to whether there are similar mechanisms of regulation for commonly expressed genes found in both cartilage and bone or whether these genes have unique regulatory mechanisms in these different tissues. These recent findings suggest that hypertrophic chondrocytes are functionally coupled during endochondral bone formation to the recruitment of osteoblasts, vascular cells, and osteoclasts.