Skeletal elements are formed either by replacing a preformed cartilagenous matrix template in a process called endochondral ossification or directly from mesenchyme by a process known as membranous ossification. Longitudinal growth of bones is achieved by growth plates where calcified cartilage is converted into bone. To investigate the role of extracellular matrix as well as intracellular signaling pathways in the formation and growth of bone, the genes coding for type II collagen and cyclic guanosine 3′,5′-monophosphate (cGMP)-dependent protein kinase (cGK) II, were disrupted. It is demonstrated that loss of Col2a1 or cGKII led to abnormal endochondral ossification and skeletal development. In cGKII −/− mice, bones derived by membranous ossification developed normally while bones derived by endochondral ossification were shortened. This growth defect was not associated with a general metabolic disturbance. In Col2a1 knockout mice, endochondral ossification was completely absent, whereas membraneous ossification was not affected. Despite the defects in bone formation, invasion of blood vessels into bone cavities and formation of bone marrow occurred in Col2a1-null mice. Taken together, the phenotypes of these two knockout mice show that chondrocytes need a well-functioning extracellular matrix scaffold and a normal cGMP-signaling system for endochondral ossification to form a normal skeleton.