A recent breakthrough showing that direct trans-differentiation of chondrocytes into bone cells commonly occurs during endochondral bone formation in the growth plate, articular cartilage, and mandibular condylar cartilage suggests that chondrogenesis and osteogenesis are likely one continuous biological process instead of two separate processes. Yet, gene regulation of this cell transformation is largely unclear. Here, we employed cartilage-specific loss-of-function ( ) and gain-of-function ( ) models in the background (for better tracing the cell fate of chondrocytes) to study the role of in cell trans-differentiation. Using histological, immunohistochemical, and radiological methods combined with cell lineage tracing techniques, we showed that deletion of by either -Cre or -Cre resulted in greatly reduced cell trans-differentiation with a significant decrease in subchondral bone volume during mandibular condylar growth. Molecular studies demonstrated severe defects in cell proliferation and differentiation in both chondrocytes and bone cells. The gain of function studies (constitutive activation of with -Cre at ages of postnatal day 7, 4-weeks and 6-months) led to more bone cell trans-differentiation of chondrocytes in the mandibular condyle due to increased proliferation and accelerated chondrocyte differentiation with incipient osteogenic changes within the cartilage matrix, resulting in an increased volume of poorly-formed immature subchondral bone. These results support the notion that chondrogenesis and osteogenesis are one continuous process, in which signaling plays an essential role in the cell trans-differentiation of chondrocytes into bone cells during mandibular condylar development and growth.