We generated transgenic mice that express a constitutively active mutant of MEK1 in chondrocytes. These mice showed a dwarf phenotype similar to achondroplasia, the most common human dwarfism, caused by activating mutations in FGFR3. These mice displayed incomplete hypertrophy of chondrocytes in the growth plates and a general delay in endochondral ossification, whereas chondrocyte proliferation was unaffected. Immunohistochemical analysis of the cranial base in transgenic embryos showed reduced staining for collagen type X and persistent expression of Sox9 in chondrocytes. These observations indicate that the MAPK pathway inhibits hypertrophic differentiation of chondrocytes and negatively regulates bone growth without inhibiting chondrocyte proliferation. Expression of a constitutively active mutant of MEK1 in chondrocytes of Fgfr3-deficient mice inhibited skeletal overgrowth, strongly suggesting that regulation of bone growth by FGFR3 is mediated at least in part by the MAPK pathway. Although loss of Stat1 restored the reduced chondrocyte proliferation in mice expressing an achondroplasia mutant of Fgfr3, it did not rescue the reduced hypertrophic zone, the delay in formation of secondary ossification centers, and the achondroplasia-like phenotype. These observations suggest a model in which Fgfr3 signaling inhibits bone growth by inhibiting chondrocyte differentiation through the MAPK pathway and by inhibiting chondrocyte proliferation through Stat1.