Modification of the sulfation pattern of heparan sulfate (HS) during organ development is thought to regulate binding and signal transduction of several growth factors. The secreted sulfatases, Sulf1 and Sulf2, desulfate HS on 6-O-positions extracellularly. We show that both sulfatases are expressed in overlapping patterns during embryonic skeletal development. Analysis of compound mutants of Sulf1 and Sulf2 derived from gene trap insertions and targeted null alleles revealed subtle but distinct skeletal malformations including reduced bone length, premature vertebrae ossification and fusions of sternebrae and tail vertebrae. Molecular analysis of endochondral ossification points to a function of Sulf1 and Sulf2 in delaying the differentiation of endochondral bones. Penetrance and severity of the phenotype increased with reduced numbers of functional alleles indicating redundant functions of both sulfatases. The mild skeletal phenotype of double mutants suggests a role for extracellular modification of 6-O-sulfation in fine-tuning rather than regulating the development of skeletal structures.