The Wnt antagonist Frzb-1 is expressed during limb skeletogenesis, but its roles in this complex multistep process are not fully understood. To address this issue, we determined Frzb-1 gene expression patterns during chick long bone development and carried out gain- and loss-of-function studies by misexpression of Frzb-1, Wnt-8 (a known Frzb-1 target), or different forms of the intracellular Wnt mediator LEF-1 in developing limbs and cultured chondrocytes. Frzb-1 expression was quite strong in mesenchymal prechondrogenic condensations and then characterized epiphyseal articular chondrocytes and prehypertrophic chondrocytes in growth plates. Virally driven Frzb-1 misexpression caused shortening of skeletal elements, joint fusion, and delayed chondrocyte maturation, with consequent inhibition of matrix mineralization, metalloprotease expression, and marrow/bone formation. In good agreement, misexpression of Frzb-1 or a dominant-negative form of LEF-1 in cultured chondrocytes maintained the cells at an immature stage. Instead, misexpression of Wnt-8 or a constitutively active LEF-1 strongly promoted chondrocyte maturation, hypertrophy, and calcification. Immunostaining revealed that the distribution of endogenous Wnt mediator beta-catenin changes dramatically in vivo and in vitro, from largely cytoplasmic in immature proliferating and prehypertrophic chondrocytes to nuclear in hypertrophic mineralizing chondrocytes. Misexpression of Frzb-1 prevented beta-catenin nuclear relocalization in chondrocytes in vivo or in vitro. The data demonstrate that Frzb-1 exerts a strong influence on limb skeletogenesis and is a powerful and direct modulator of chondrocyte maturation, phenotype, and function. Phases of skeletogenesis, such as terminal chondrocyte maturation and joint formation, appear to be particularly dependent on Wnt signaling and thus very sensitive to Frzb-1 antagonistic action.