Biochemical experiments have shown that Smad6 and Smad ubiquitin regulatory factor 1 (Smurf1) block the signal transduction of bone morphogenetic proteins (BMPs). However, their in vivo functions are largely unknown. Here, we generated transgenic mice overexpressing Smad6 in chondrocytes. Smad6 transgenic mice showed postnatal dwarfism with osteopenia and inhibition of Smad1/5/8 phosphorylation in chondrocytes. Endochondral ossification during development in these mice was associated with almost normal chondrocyte proliferation, significantly delayed chondrocyte hypertrophy, and thin trabecular bone. The reduced population of hypertrophic chondrocytes after birth seemed to be related to impaired bone growth and formation. Organ culture of cartilage rudiments showed that chondrocyte hypertrophy induced by BMP2 was inhibited in cartilage prepared from Smad6 transgenic mice. We then generated transgenic mice overexpressing Smurf1 in chondrocytes. Abnormalities were undetectable in Smurf1 transgenic mice. Mating Smad6 and Smurf1 transgenic mice produced double-transgenic pups with more delayed endochondral ossification than Smad6 transgenic mice. These results provided evidence that Smurf1 supports Smad6 function in vivo.