Abstract Peripheral neuropeptide Y (NPY) has been reported to regulate bone metabolism and homeostasis; however, its potential roles in growth plate chondrogenesis remain unclear. Here, we found that NPY expression decreased during chondrocyte differentiation in vitro and in vivo. NPY was required for chondrocyte proliferation; in contrast, knockdown of NPY facilitated chondrocyte hypertrophic differentiation. Administration of recombinant NPY in rat chondrocytes and metatarsal bones uncoupled normal proliferation and hypertrophic differentiation during chondrogenesis and thereby inhibited growth plate chondrogenesis and longitudinal bone growth. Remarkably, NPY activated the mTORC1 pathway in chondrocytes, whereas attenuation of mTORC1 activity by administration of rapamycin in vitro partially abrogated NPY-mediated effects on chondrocyte proliferation and hypertrophic differentiation. In addition, a combination of Y2R antagonist but not Y1R antagonist with NPY abolished NPY-mediated inhibition of metatarsal growth and growth plate chondrogenesis. Mechanistically, NPY activated Erk1/2 by NPY2R, then phosphorylated ERK1/2 activated mTORC1 to initiate PTHrP expression, which in turn promoted chondrocyte proliferation and inhibited chondrocyte hypertrophic differentiation. In conclusion, our data identified NPY as a crucial regulator of chondrogenesis and may provide a promising therapeutic strategy for skeletal diseases.