The balance between anabolic and catabolic signaling pathways is critical in maintaining cartilage homeostasis and its disturbance contributes to joint diseases such as osteoarthritis (OA). A unique mechanism that modulates the activity of cell signaling pathways is controlled by extracellular heparan endosulfatases Sulf-1 and Sulf-2 (Sulfs) that are overexpressed in OA cartilage. This study addressed the role of Sulfs in cartilage homeostasis and in regulating bone morphogenetic protein (BMP)/Smad and fibroblast growth factor (FGF)/Erk signaling in articular cartilage. Spontaneous cartilage degeneration and surgically induced OA were significantly more severe in Sulf-1 −/− and Sulf-2 −/− mice compared with wild-type mice. MMP-13, ADAMTS-5, and the BMP antagonist noggin were elevated whereas col2a1 and aggrecan were reduced in cartilage and chondrocytes from Sulf −/− mice. Articular cartilage and cultured chondrocytes from Sulf −/− mice showed reduced Smad1 protein expression and Smad1/5 phosphorylation, whereas Erk1/2 phosphorylation was increased. In human chondrocytes, Sulfs siRNA reduced Smad phosphorylation but enhanced FGF-2-induced Erk1/2 signaling. These findings suggest that Sulfs simultaneously enhance BMP but inhibit FGF signaling in chondrocytes and maintain cartilage homeostasis. Approaches to correct abnormal Sulf expression have the potential to protect against cartilage degradation and promote cartilage repair in OA.artilage homeostasis is controlled by extracellular factors such as mechanical loading, cytokines, and growth factors that are translated by intracellular signaling pathways to changes in cell survival, activation, and differentiation. Abnormal activation of these signaling pathways during development results in skeletal dysplasias and, in mature joints, leads to osteoarthritis (OA) (1).Bone morphogenetic proteins (BMPs) regulate various stages of cartilage and bone development (2-4), promote chondrogenesis from mesenchymal stem cells, and stimulate cartilage repair (5-7). BMPs bind and signal through serine/threonine kinase receptors (8-10). BMP-7 binding to the BMP receptor type IB leads to receptor dimerization so that the type I receptor phosphorylates Smad1/5/8 and stimulates expression of genes that promote cartilage repair (7, 11) and may protect against OA (6, 12). The BMP antagonist noggin is a secreted protein that interacts with heparan sulfate proteoglycans (HSPGs) at the cell membrane where it binds and prevents BMP-2, -4, -6, and -7 from activating their receptors (13).In contrast, fibroblast growth factor-2 (FGF-2) stimulates catabolic responses in chondrocytes by activating Erk1/2 (14). Models have been proposed to describe the interaction of HSPGs with FGFs and their receptors, yet the precise molecular details remain to be determined (15). It has been established that FGF signaling requires HSPGs to form stable ligand/receptor complexes, apparently by protecting the FGF ligand from proteolytic degradation and by enhancing and stabilizing cell surface ligand/receptor ...