The majority of human skeletal dysplasias are caused by dysregulation of growth plate homeostasis. As TGF-beta signaling is a critical determinant of growth plate homeostasis, skeletal dysplasias are often associated with dysregulation of this pathway. The context-dependent action of TFG-beta signaling is tightly controlled by numerous mechanisms at the extracellular level and downstream of ligand-receptor interactions. However, TGF-beta is synthesized as an inactive precursor that is cleaved to become mature in the Golgi apparatus, and the regulation of this posttranslational intracellular processing and trafficking is much less defined. Here, we report that a cysteine-rich protein, E-selectin ligand-1 (ESL-1), acts as a negative regulator of TGF-beta production by binding TGF-beta precursors in the Golgi apparatus in a cell-autonomous fashion, inhibiting their maturation. Furthermore, ESL-1 inhibited the processing of proTGF-beta by a furin-like protease, leading to reduced secretion of mature TGF-beta by primary mouse chondrocytes and HEK293 cells. In vivo loss of Esl1 in mice led to increased TGF-beta/SMAD signaling in the growth plate that was associated with reduced chondrocyte proliferation and delayed terminal differentiation. Gain-of-function and rescue studies of the Xenopus ESL-1 ortholog in the context of early embryogenesis showed that this regulation of TGF-beta/Nodal signaling was evolutionarily conserved. This study identifies what we believe to be a novel intracellular mechanism for regulating TGF-beta during skeletal development and homeostasis.