A previously identified enhancer 10 kb upstream of the Aggrecan (Acan) gene (UE) can drive cartilage specific reporter expression in vivo. Here, we report that the paralogous transcription factors PAX1 and PAX9 differentially drive UE, depending on the presence or absence of SOX9-driven transactivation. In the developing vertebral column, PAX1/9 expression was inversely correlated with Acan expression. Moreover, PAX1/9 was co-expressed with SOX9/5/6 in the intervertebral mesenchyme and the inner annulus fibrosus (AF), and with SOX9 in the outer AF. Significant Acan upregulation was observed during chondrification of Pax1-silenced AF cells, while, Acan was significantly downregulated by persistent expression of Pax1 in cartilage. Deletion of UE using CRISPR/Cas9 resulted in ~30% and ~40% reduction of Acan expression in cartilage and the AF, respectively. In the UE, PAX1/9 acts as weak transactivators through a PAX1/9-binding site partially overlapped with a SOX9-binding site. In the presence of SOX9, which otherwise drives robust Acan expression along with SOX5/6, PAX1/9 competes with SOX9 for occupancy of the binding site, resulting in reduced transactivation of Acan. Coimmunoprecipitation revealed the physical interaction of Pax1 with SOX9. Thus, transactivation of the UE is differentially regulated by concerted action of PAX1/9, SOX9, and SOX5/6 in a context-dependent manner.