The present study demonstrated that T cell factor 1 (TCF-1) protein, a component of the canonical Wnt/β-catenin signaling pathway, can regulate the expression of runt-related transcription factor 2 (runx2) gene and Sry-related HMG box 9 (sox9) gene, which may participate in the differentiation of chondrosarcoma. Dedifferentiated chondrosarcoma (DDCS) is a special variant of conventional chondrosarcoma (CCS), associated with poor survival and high metastasis rate. However, little is known about the mechanism of its occurrence; thus, no effective treatment is available except surgery. Earlier, high expression of runx2 and low expression of sox9 were found in DDCS compared with CCS. Using Western blot to detect clinical tissue samples (including 8 CCS samples and 8 DDCS samples) and immunohistochemistry to detect 85 different-grade chondrosarcoma specimens, a high expression of TCF-1 in DDCS tissues was found compared with CCS tissues. This difference in expression was related to patients’ prognosis. Results of luciferase, chromatin immunoprecipitation, and gel electrophoresis mobility shift assays demonstrated that TCF-1 protein could bind to the promoter of runx2 gene directly and sox9 gene indirectly. Hence, it could regulate expression of runx2 gene positively and sox9 gene negatively. Furthermore, in vitro and in vivo experiments showed that TCF-1 protein was closely related to the phenotype and aggressiveness of chondrosarcoma. In conclusion, this study proved that TCF-1 participates in the dedifferentiation of DDCS, which may be mediated by runx2 gene and sox9 gene. Also, TCF-1 can be of important prognostic value and a promising therapeutic target for DDCS patients.