The role of Hedgehogs (Hh) in murine skeletal development was studied by overexpressing human Sonic Hedgehog (SHH) in chondrocytes of transgenic mice using the collagen II promoter/enhancer. Overexpression caused a lethal craniorachischisis with major alterations in long bones because of defects in chondrocyte differentiation. Hedgehogs (Hhs) are a family of secreted polypeptides that play important roles in vertebrate development, controlling many critical steps of cell differentiation and patterning. Skeletal development is affected in many different ways by Hhs. Genetic defects and anomalies of Hhs signaling pathways cause severe abnormalities in the appendicular, axial, and cranial skeleton in man and other vertebrates. Genetic manipulation of mouse embryos was used to study in vivo the function of SHH in skeletal development. By DNA microinjection into pronuclei of fertilized oocytes, we have generated transgenic mice that express SHH specifically in chondrocytes using the cartilage-specific collagen II promoter/enhancer. Transgenic skeletal development was studied at different embryonic stages by histology. The expression pattern of specific chondrocyte molecules was studied by immunohistochemistry and in situ hybridization. Transgenic mice died at birth with severe craniorachischisis and other skeletal defects in ribs, sternum, and long bones. Detailed analysis of long bones showed that chondrocyte differentiation was blocked at prehypertrophic stages, hindering endochondral ossification and trabecular bone formation, with specific defects in different limb segments. The growth plate was highly disorganized in the tibia and was completely absent in the femur and humerus, leading to skeletal elements entirely made of cartilage surrounded by a thin layer of bone. In this cartilage, chondrocytes maintained a columnar organization that was perpendicular to the bone longitudinal axis and directed toward its outer surface. The expression of SHH receptor, Patched-1 (Ptc1), was greatly increased in all cartilage, as well as the expression of parathyroid hormone-related protein (PTHrP) at the articular surface; while the expression of Indian Hedgehog (Ihh), another member of Hh family that controls the rate of chondrocyte maturation, was greatly reduced and restricted to the displaced chondrocyte columns. Transgenic mice also revealed the ability of SHH to upregulate the expression of Sox9, a major transcription factor implicated in chondrocyte-specific gene expression, in vivo and in vitro, acting through the proximal 6.8-kb-long Sox9 promoter. Transgenic mice show that continuous expression of SHH in chondrocytes interferes with cell differentiation and growth plate organization and induces high levels and diffuse expression of Sox9 in cartilaginous bones.