Many tissues have a specific signal transduction system for endoplasmic reticulum (ER) dysfunction; however, the mechanisms underlying the ER stress response in cartilage remain unclear. BBF2H7 (BBF2 human homologue on chromosome 7), an ER-resident basic leucine zipper transcription factor, is activated in response to ER stress and is highly expressed in chondrocytes. In this study, we generated Bbf2h7(-/-) mice to assess the in vivo function of BBF2H7. The mice showed severe chondrodysplasia and died by suffocation shortly after birth because of an immature chest cavity. The cartilage showed a lack of typical columnar structure in the proliferating zone and a decrease in the size of the hypertrophic zone, resulting in a significant reduction of extracellular matrix proteins. Interestingly, proliferating chondrocytes showed abnormally expanded ER, containing aggregated type II collagen (Col2) and cartilage oligomeric matrix protein (COMP). We identified Sec23a, which encodes a coat protein complex II component responsible for protein transport from the ER to the Golgi, as a target of BBF2H7, which directly bound to a CRE-like sequence in the promoter region of Sec23a to activate its transcription. When Sec23a was introduced to Bbf2h7(-/-) chondrocytes, the impaired transport and secretion of cartilage matrix proteins was totally restored, indicating that by activating protein secretion the BBF2H7-Sec23a pathway has a crucial role in chondrogenesis. Our findings provide a new link by which ER stress is converted to signalling for the activation of ER-to-Golgi trafficking.