Much of the mammalian skeleton is composed of bones that originate from cartilage templates through endochondral ossification. Elucidating the mechanisms that control endochondral bone development is critical for understanding human skeletal diseases, injury response, and aging. Mouse genetic studies in the past 15 years have provided unprecedented insights about molecules regulating chondrocyte formation, chondrocyte maturation, and osteoblast differentiation, all key processes of endochondral bone development. These include the roles of the secreted proteins IHH, PTHrP, BMPs, WNTs, and FGFs, their receptors, and transcription factors such as SOX9, RUNX2, and OSX, in regulating chondrocyte and osteoblast biology. This review aims to integrate the known functions of extracellular signals and transcription factors that regulate development of the endochondral skeleton.

Bone formation in mammals requires continuous production of osteoblasts throughout life. A common molecular marker for all osteogenic mesenchymal progenitors has not been identified. Here, by lineage-tracing experiments in fetal or postnatal mice, we discover that Gli1⁺ cells progressively produce osteoblasts in all skeletal sites. Most notably, in postnatal growing mice, the Gli1⁺ cells residing immediately beneath the growth plate, termed here “metaphyseal mesenchymal progenitors” (MMPs), are essential for cancellous bone formation. Besides osteoblasts, MMPs also give rise to bone marrow adipocytes and stromal cells in vivo. RNA-seq reveals that MMPs express a number of marker genes previously assigned to mesenchymal stem/progenitor cells, including CD146/Mcam, CD44, CD106/Vcam1, Pdgfra, and Lepr. Genetic disruption of Hh signaling impairs proliferation and osteoblast differentiation of MMPs. Removal of β-catenin causes MMPs to favor adipogenesis, resulting in osteopenia coupled with increased marrow adiposity. Finally, postnatal Gli1⁺ cells contribute to both chondrocytes and osteoblasts during bone fracture healing. Thus Gli1 marks mesenchymal progenitors responsible for both normal bone formation and fracture repair.