Background: C-type natriuretic peptide (CNP) has recently been identified as an important anabolic regulator of endochondral bone growth, but the molecular mechanisms mediating its effects are not completely understood. Results: We demonstrate in a tibia organ culture system that pharmacological inhibition of p38 blocks the anabolic effects of CNP. We further show that CNP stimulates endochondral bone growth largely through expansion of the hypertrophic zone of the growth plate, while delaying mineralization. Both effects are reversed by p38 inhibition. We also performed Affymetrix microarray analyses on micro-dissected tibiae to identify CNP target genes. These studies confirmed that hypertrophic chondrocytes are the main targets of CNP signaling in the growth plate, since many more genes were regulated by CNP in this zone than in the others. While CNP receptors are expressed at similar levels in all three zones, cGMP-dependent kinases I and II, important transducers of CNP signaling, are expressed at much higher levels in hypertrophic cells than in other areas of the tibia, providing a potential explanation for the spatial distribution of CNP effects. In addition, our data show that CNP induces the expression of NPR3, a decoy receptor for natriuretic peptides, suggesting the existence of a feedback loop to limit CNP signaling. Finally, detailed analyses of our microarray data showed that CNP regulates numerous genes involved in BMP signaling and cell adhesion. Conclusion: Our data identify novel target genes of CNP and demonstrate that the p38 pathway is a novel, essential mediator of CNP effects on endochondral bone growth, with potential implications for understanding and treatment of numerous skeletal diseases. © 2007 Agoston et al; licensee BioMed Central Ltd.