Chondrocyte hypertrophy followed by cartilage matrix degradation and vascular invasion, characterized by expression of type X collagen (COL10A1), matrix metalloproteinase-13 (MMP-13) and vascular endothelial growth factor (VEGF), respectively, are central steps of endochondral ossification during normal skeletal growth and osteoarthritis development. A COL10A1 promoter assay identified hypoxia-inducible factor-2alpha (HIF-2alpha, encoded by EPAS1) as the most potent transactivator of COL10A1. HIF-2alpha enhanced promoter activities of COL10A1, MMP13 and VEGFA through specific binding to the respective hypoxia-responsive elements. HIF-2alpha, independently of oxygen-dependent hydroxylation, was essential for endochondral ossification of cultured chondrocytes and embryonic skeletal growth in mice. HIF-2alpha expression was higher in osteoarthritic cartilages versus nondiseased cartilages of mice and humans. Epas1-heterozygous deficient mice showed resistance to osteoarthritis development, and a functional single nucleotide polymorphism (SNP) in the human EPAS1 gene was associated with knee osteoarthritis in a Japanese population. The EPAS1 promoter assay identified RELA, a nuclear factor-kappaB (NF-kappaB) family member, as a potent inducer of HIF-2alpha expression. Hence, HIF-2alpha is a central transactivator that targets several crucial genes for endochondral ossification and may represent a therapeutic target for osteoarthritis.