Abstract The evolutionarily conserved transcriptional cofactor Jab1 plays critical roles in cell differentiation, proliferation, and apoptosis by modulating the activity of diverse factors and regulating the output of various signaling pathways. Although Jab1 can interact with BMP downstream effector Smad5 to repress BMP signaling in vitro, the role of Jab1 in BMP-mediated skeletogenesis in vivo is still poorly understood. As a key regulator of skeletogenesis, BMP signaling regulates the critical Ihh-Pthrp feedback loop to promote chondrocyte hypertrophy. In this study, we utilized the loxP/Cre system to delineate the specific role of Jab1 in cartilage formation. Strikingly, Jab1 chondrocyte-specific knockout Jab1(flox/flox); Col2a1-Cre (cKO) mutants exhibited neonatal lethal chondrodysplasia with severe dwarfism. In the mutant embryos, all the skeletal elements developed via endochondral ossification were extremely small with severely disorganized chondrocyte columns. Jab1 cKO chondrocytes exhibited increased apoptosis, G2 phase cell cycle arrest, and increased expression of hypertrophic chondrocyte markers Col10a1 and Runx2. Jab1 can also inhibit the transcriptional activity of Runx2, a key regulator of chondrocyte hypertrophy. Notably, our study reveals that Jab1 is likely a novel inhibitor of BMP signaling in chondrocytes in vivo. In Jab1 cKO chondrocytes, there was heightened expression of BMP signaling components including Gdf10/Bmp3b and of BMP targets during chondrocyte hypertrophy such as Ihh. Furthermore, Jab1 cKO chondrocytes exhibited an enhanced response to exogenous BMP treatment. Together, our study demonstrates that Jab1 represses chondrocyte hypertrophy in vivo, likely in part by downregulating BMP signaling and Runx2 activity.