Over the past several years, the C-natriuretic peptide (CNP) has emerged as an important regulator of cartilage homeostasis and endochondral bone growth. In mice, genetic ablation of CNP or its cognate receptor NPRB results in marked dwarfism. When a downstream component of CNP signaling, protein kinase-G II (PKGII), is removed from cartilage, the mice have disturbed chondrocyte proliferation and cartilage matrix production. In contrast, activating mutations in PKGII as well as overexpression of CNP result in significant skeletal overgrowth in mice, demonstrating the positive role of CNP signaling in regulation of mammalian chondrocyte proliferation and cartilage matrix production. This is further supported by the existence of a human dwarfism, acromesomelic dysplasia Maroteaux-type (MIM #602875) that is caused by loss-of-function of NPRB. In comparison with other signaling systems, the molecular basis of CNP signaling in cartilage remains largely unknown, thus leaving many important questions open for future investigation. This review summarizes our current knowledge about the mechanism of CNP signaling in cartilage, areas for future investigation and its potential therapeutic uses.