The axial and appendicular skeleton of vertebrates develops by endochondral ossification, in which skeletogenic tissue is initially cartilaginous and the differentiation of chondrocytes via the hypertrophic pathway precedes the differentiation of osteoblasts and the deposition of a definitive bone matrix. Results from both loss-of-function and misexpression studies have implicated the related homeobox genes Dlx5 and Dlx6 as partially redundant positive regulators of chondrocyte hypertrophy. However, experimental perturbations of Dlx expression have either not been cell type specific or have been done in the context of endogenous Dlx5 expression. Thus, it has not been possible to conclude whether the effects on chondrocyte differentiation are cell autonomous or whether they are mediated by Dlx expression in adjacent tissues, notably the perichondrium. To address this question we first engineered transgenic mice in which Dlx5 expression was specifically restricted to immature and differentiating chondrocytes and not the perichondrium. Col2a1-Dlx5 transgenic embryos and neonates displayed accelerated chondrocyte hypertrophy and mineralization throughout the endochondral skeleton. Furthermore, this transgene specifically rescued defects of chondrocyte differentiation characteristic of the Dlx5/6 null phenotype. Based on these results, we conclude that the role of Dlx5 in the hypertrophic pathway is cell autonomous. We further conclude that Dlx5 and Dlx6 are functionally equivalent in the endochondral skeleton, in that the requirement for Dlx5 and Dlx6 function during chondrocyte hypertrophy can be satisfied with Dlx5 alone.