A cartilaginous pectoral fin endoskeleton in zebrafish (Danio rerio) develops early, after which the cartilage of the larval fin endoskeleton undergoes a complete transformation into the adult morphology. This transformation includes multiple subdivisions of a single cartilaginous disk. The type of cartilage subdivision is unique to teleost fish. In this study, we present the timing and the developmental features of these subdivisions and we discuss variation in this process, caused by differences in growth rate. We establish that the cartilage subdivisions are developmentally linked to the formation of lepidotrichia in the fin fold. At the cellular level, we show that neither apoptosis nor resorption by chondroclasts and/or macrophages contributes to the cartilage subdivision. Ultrastructural observations show dedifferentiation of chondrocytes in subdivision zones. Different from forelimb development in other vertebrates, dedifferentiation is an important mechanism in the development of the adult pectoral fin skeleton. We here provide further support for the idea that the phenotype of skeletal tissues is not terminal and that plasticity of differentiated connective tissues can play an important role in various developmental and homeostatic processes.