The intracellular signaling pathways controlling chondrocyte physiology are largely unknown. Here we show that the small GTPases, Rac1 and Cdc42, accelerate the rate of chondrocyte differentiation and apoptosis, thereby antagonizing the activity of RhoA. These results identify Rac1 and Cdc42 pathways as novel regulators of cartilage development. Proliferation, hypertrophic differentiation, and ultimate apoptosis of chondrocytes regulate endochondral bone growth and development, but the intracellular signaling pathways controlling chondrocyte biology are incompletely understood. In this study, we investigated the role of the small GTPases Rac1 and Cdc42 in chondrocytes. Rac1 and Cdc42 expression during chondrogenic differentiation was assessed by RT-PCR and Western blotting. Effects of Rac1 and Cdc42 on parameters of chondrocyte biology were studied using transient transfections into primary mouse chondrocytes and stable transfections of the chondrogenic cell line ATDC5. Luciferase assays, RT-PCR, cell proliferation, alkaline phosphatases assays, staining procedures, TUNEL assays, and caspase activity assays were performed to study the chondrocyte response to overexpression of Rac1 and Cdc42 proteins. Activation of the p38 pathway was analyzed using Western blotting with phospho-specific antibodies, and mitogen-activated protein (MAP) kinase pathways were inhibited using pharmacological approaches. Rac1 and Cdc42 activities are required for maximal activity of the collagen X promoter, a hypertrophic marker, in primary chondrocytes, suggesting essential roles of these GTPases in chondrocyte hypertrophy. Overexpression of Rac1 or Cdc42 in chondrogenic ATDC5 cells results in reductions in cell numbers and marked acceleration of hypertrophic differentiation, thus opposing the effects of the related GTPase RhoA. Rac1 and Cdc42 also induce accelerated chondrocyte apoptosis, as shown by TUNEL and caspase activity assays and changes in cell morphology and actin organization. Rac1 and Cdc42 overexpression results in activation of the p38 MAP kinase pathway in ATDC5 cells, and pharmacological inhibition of p38 signaling blocks the effects of Rac1 and Cdc42 overexpression on hypertrophy and apoptosis. Our results therefore suggest that Rac1 and Cdc42 signaling accelerates progression through the chondrocyte life cycle in a p38-dependent fashion and antagonizes RhoA signaling pathways in chondrocyte proliferation, hypertrophy, and apoptosis.