Calpains are calcium-dependent intracellular cysteine proteases, which include ubiquitously expressed -and m-calpains. Both calpains are heterodimers consisting of a large catalytic subunit and a small regulatory subunit. The calpain small subunit encoded by the gene Capn4 directly binds to the intracellular C-terminal tail of the receptor for the parathyroid hormone (PTH) and PTH-related peptide and modulates cellular functions in cells of the osteoblast lineage in vitro and in vivo. To investigate a physiological role of the calpain small subunit in cells of the chondrocyte lineage, we generated chondrocyte-specific Capn4 knockout mice. Mutant embryos had reduced chondrocyte proliferation and differentiation in embryonic growth plates compared with control littermates. In vitro analysis further revealed that deletion of Capn4 in cells of the chondrocyte lineage correlated with impaired cell cycle progression at the G 1 /S transition, reduced cyclin D gene transcription, and accumulated cell cycle proteins known as calpain substrates. Moreover, silencing of p27Kip1 rescued an impaired cell growth phenotype in Capn4 knockdown cells, and reintroducing the calpain small subunit partially normalized cell growth and accumulated cyclin D protein levels in a dose-dependent manner. Collectively, our findings suggest that the calpain small subunit is essential for proper chondrocyte functions in embryonic growth plates.Ubiquitously expressed -and m-calpains belong to a family of calcium-dependent intracellular cysteine proteases (8, 13) and form heterodimers consisting of a large catalytic subunit encoded by the genes Capn1 and Capn2, respectively, and a small regulatory subunit encoded by the gene Capn4 (13). Deletion of Capn4 eliminates both -and m-calpain activities in embryonic fibroblasts (2), suggesting that the calpain small subunit is critical for maintenance of calpain stability and activity. Genetic ablation of Capn4 results in embryonic lethality, which demonstrates an essential role of the calpain small subunit during embryonic development (2, 53).We previously created osteoblast-specific Capn4 knockout mice by mating mice homozygous for floxed Capn4 alleles (Capn4 flox/flox ) (46) with those expressing Cre driven by the osterix promoter (Osx-Cre ϩ/Ϫ ) (38) and showed that lack of the calpain small subunit in cells of the osteoblast lineage results in a significant reduction of both trabecular and cortical bone, which is associated with a severe impairment of osteoblast proliferation and differentiation (41). Interestingly, in Osx-Cre ϩ/Ϫ transgenic mice, Cre recombinase is expressed not only in early cells of the osteoblast lineage but also in late proliferating chondrocytes (22). We, thus, speculated that the smaller size of the skeletons of Osx-Cre ϩ/Ϫ Capn4 flox/flox newborn mice could be at least partially due to abnormal growth plate development, which is associated with genetic ablation of Capn4 in chondrocytes.m-Calpain has been reported to be expressed in hypertrophic chondrocytes in normal rat grow...