Long bone abnormality (lbab/lbab) is a spontaneous mutant mouse characterized by dwarfism with shorter long bones. A missense mutation was reported in the Nppc gene, which encodes C-type natriuretic peptide (CNP), but it has not been confirmed whether this mutation is responsible for the dwarf phenotype. To verify that the mutation causes the dwarfism of lbab/lbab mice, we first investigated the effect of CNP in lbab/lbab mice. By transgenic rescue with chondrocyte-specific expression of CNP, the dwarf phenotype in lbab/lbab mice was completely compensated. Next, we revealed that CNP derived from the lbab allele retained only slight activity to induce cGMP production through its receptor. Histological analysis showed that both proliferative and hypertrophic zones of chondrocytes in the growth plate of lbab/lbab mice were markedly reduced. Our results demonstrate that lbab/lbab mice have a hypomorphic mutation in the Nppc gene that is responsible for dwarfism caused by impaired endochondral ossification.