Cdc42 is a widely expressed protein that belongs to the family of Rho GTPases and controls a broad variety of signal transduction pathways in a variety of cell types. To investigate the physiological functions of Cdc42 during cartilage development, we generated chondrocyte-specific inactivated Cdc42 mutant mice (Cdc42(fl/fl); Col2-Cre). The gross morphology of mutant neonates showed shorter limbs and body as compared with the control mice (Cdc42(fl/fl)). Skeletal preparations stained with alcian blue and alizarin red also revealed that the body and the long bone length of the mutants were shorter than those of the control mice. Furthermore, severe defects were found in growth plate chondrocytes in the femur sections of mutant mice, characterized by a reduced proliferating zone height, wider hypertrophic zone, and loss of columnar organization in proliferating chondrocytes. The expression levels of chondrocyte marker genes, such as Col2, Col10, and Mmp13, in mutant mice were decreased as compared with the control mice. Mineralization of trabecular bones in the femur sections was also decreased in the mutants as compared with control mice, whereas osteoid volume was increased. Together these results suggested that chondrocyte proliferation and differentiation in growth plates in the present mutant mice were not normally organized, which contributed to abnormal bone formation. We concluded that Cdc42 is essential for cartilage development during endochondral bone formation.