ADAMTS-12, a metalloproteinase that belongs to ADAMTS family, is strongly upregulated during chondrogenesis and demonstrates prominent expression in the growth plate chondrocytes. ADAMTS-12 potently inhibits chondrocyte differentiation, as revealed by altered expression of both early and later genes critical for chondrogenesis. In addition, ADAMTS-12-mediated inhibition of chondrogenesis depends on its enzymatic activity, since its point mutant lacking enzymatic activity completely loses this activity. Furthermore, the C-terminal four thrombospondin motifs known to bind COMP substrate is necessary for its full proteolytic activity and inhibition of chondrocyte differentiation. Mechanism studies demonstrate that ADAMTS-12 induces PTHrP, whereas it inhibits IHH during chondrogenesis. Furthermore, PTHrP induces ADAMTS-12 and ADAMTS-12 is hardly detectable in PTHrP-/-growth plate chondrocytes. Importantly, knocking down ADAMTS-12 mRNA levels or blocking ADAMTS-12 activity almost abolishes the PTHrP-mediated inhibition of type X collagen expression. Collectively, these findings demonstrate that ADAMTS-12, a downstream molecule of PTHrP signaling, is a novel regulator of chondrogenesis.