In this study, we address the function of Transforming Growth Factor beta (TGF-β) and its type II receptor (Tgfbr2) in limb development in vivo. Mouse embryos were generated in which the Tgfbr2 gene was deleted in early limb mesenchyme using Prx1Cre-mediated LoxP recombination. A high level of Tgfbr2 gene deletion was verified in limb mesenchyme by PCR between E9.5 and E10.5 days in Cre expressing mice. RT-PCR assays indicated a significant depletion of Tgfbr2 mRNA by E10.5 days as a result of Cre mediated gene deletion. Furthermore, limb mesenchyme from Cre+;Tgfbr2f/f mice placed in micromass culture did not respond to exogenously added TGF-β1 confirming the functional deletion of the receptor. However, there was an unexpected increase in the number and intensity of Alcian blue stained chondrogenic nodules in micromass cultures derived from Tgfbr2-deleted limbs relative to cultures from control limbs suggesting that Tgfbr2 normally limits chondrogenesis in vitro. In vivo, early limb development and chondrocyte differentiation occurred normally in Tgfbr2-depleted mice. Later in development, depletion of Tgfbr2 in limb mesenchyme resulted in short limbs and fusion of the joints in the phalanges. Alteration in the length of the long bones was primarily due to a decrease in chondrocyte proliferation after E13.5 days. In addition, the transition from prehypertrophic to hypertrophic cells was accelerated while there was a delay in late hypertrophic differentiation leading to a reduction in the length of the marrow cavity. In the joint, cartilage cells replaced interzone cells during development. Analysis of markers for joint development indicated that the joint was specified properly and that the interzone cells were initially formed but not maintained. The results suggest that Tgfbr2 is required for normal development of the skeleton and that Tgfbr2 can act to limit chondrogenesis in mesenchymal cells like the interzone. © 2007 Elsevier Inc. All rights reserved.