Enchondromas and conventional central chondrosarcomas are, respectively, benign and malignant hyaline cartilage-forming tumours that originate in the medulla of bone. In order to gain a better understanding of the molecular process underlying malignant transformation of enchondroma, and to investigate whether there is a biological difference between conventional central cartilaginous tumours and those of enchondromatosis or with phalangeal localization, a series of 64 enchondromas (phalanx, n = 21; enchondromatosis, n = 15) and 89 chondrosarcomas (phalanx, n = 17; enchondromatosis, n = 13) was collected. Indian Hedgehog (IHH)/parathyroid hormone related peptide (PTHrP) signalling, an important pathway in chondrocyte proliferation and differentiation within the normal growth plate, was studied by immunohistochemical analysis of the expression of PTHrP, PTHR1, Bcl-2, p21, cyclin D1, and cyclin E. Quantitative real-time PCR for IHH, PTCH, SMO, and GLI2 was performed on a subset of tumours. The data show that IHH signalling is absent in enchondromas and central chondrosarcomas, while PTHrP signalling is active. There was no difference in the expression of any of the molecules between 35 enchondromas and 26 grade I central chondrosarcomas, indicating that PTHrP signalling is not important in malignant transformation of enchondroma. Higher expression of PTHR1 and Bcl-2 was associated with increasing histological grade in chondrosarcoma, suggesting involvement in tumour progression. No difference was found between samples from enchondromatosis patients and solitary cases, suggesting no difference in PTHrP signalling. A small subset of phalangeal chondrosarcomas demonstrated down-regulation of PTHrP, which may be related to its more indolent clinical behaviour. Thus, in both enchondromas and central chondrosarcomas, PTHrP signalling is active and independent of IHH signalling, irrespective of the presence or absence of enchondromatosis.