Aims This study aimed to investigate the effect of solute carrier family 20 member 2 ( SLC20A2) gene mutation (identified from a hereditary multiple exostoses family) on chondrocyte proliferation and differentiation. Methods ATDC5 chondrocytes were cultured in insulin-transferrin-selenium medium to induce differentiation. Cells were transfected with pcDNA3.0 plasmids with either a wild-type (WT) or mutated (MUT) SLC20A2 gene. The inorganic phosphate (Pi) concentration in the medium of cells was determined. The expression of markers of chondrocyte proliferation and differentiation, the Indian hedgehog (Ihh), and parathyroid hormone-related protein (PTHrP) pathway were evaluated by quantitative real-time polymerase chain reaction (qRT-PCR) and western blotting. Results The expression of SLC20A2 in MUT group was similar to WT group. The Pi concentration in the medium of cells in MUT group was significantly higher than WT group, which meant the SLC20A2 mutation inhibited Pi uptake in ATDC5 chondrocytes. The proliferation rate of ATDC5 chondrocytes in MUT group was greater than WT group. The expression of aggrecan (Acan), α-1 chain of type II collagen (COL2A1), and SRY-box transcription factor 9 (SOX9) were higher in MUT group than WT group. However, the expression of Runt-related transcription factor 2 (Runx2), α-1 chain of type X collagen (COL10A1), and matrix metallopeptidase 13 (MMP13) was significantly decreased in the MUT group. Similar results were obtained by Alcian blue and Alizarin red staining. The expression of Ihh and PTHrP in MUT group was higher than WT group. An inhibitor (cyclopamine) of Ihh/PTHrP signalling pathway inhibited the proliferation and restored the differentiation of chondrocytes in MUT group. Conclusion A mutation in SLC20A2 (c.C1948T) decreases Pi uptake in ATDC5 chondrocytes. SLC20A2 mutation promotes chondrocyte proliferation while inhibiting chondrocyte differentiation. The Ihh/PTHrP signalling pathway may play an important role in this process. Cite this article: Bone Joint Res 2020;9(11):751–760.