During endochondral ossification bones are formed as cartilage templates in which chondrocytes proliferate, differentiate into hypertrophic chondrocytes and are gradually replaced by bone. Postnatally, remnants of embryonic chondrocytes remain in a restricted domain between the ossified regions of the bones forming the growth plate. The coordinated proliferation and differentiation of chondrocytes ensures the continuous elongation of the epiphyseal growth plates. The sequential changes between proliferation and differentiation are tightly regulated by secreted growth factors, which activate chondrocyte-specific transcription factors. Transcription factors that play critical roles in regulating cell-type-specific gene expression include Sox9, Gli2/3, and Runx2. The interaction of these transcription factors with general transcriptional regulators like histone-modifying enzymes provides an additional level of regulation to fine-tune the expression of target genes in different chondrocyte populations. This review will outline recent advances in the analysis of the complex transcriptional network that regulates the distinct steps of chondrocyte differentiation.