The current view of skeletal patterning fails to explain the formation of sesamoid bones. These small bones, which facilitate musculoskeletal function, are exceptionally embedded within tendons. Although their structural design has long puzzled researchers, only a limited model for sesamoid bone development has emerged. To date, sesamoids are thought to develop inside tendons in response to mechanical signals from the attaching muscles. However, this widely accepted model has lacked substantiation. Here, we show that, contrary to the current view, in the mouse embryo the patella initially develops as a bony process at the anteriodistal surface of the femur. Later, the patella is separated from the femur by a joint formation process that is regulated by mechanical load. Concurrently, the patella becomes superficially embedded within the quadriceps tendon. At the cellular level, we show that, similar to bone eminences, the patella is formed secondarily by a distinct pool of Sox9- and Scx-positive progenitor cells. Finally, we show that TGFβ signaling is necessary for the specification of patella progenitors, whereas the BMP4 pathway is required for their differentiation. These findings establish an alternative model for patella development and provide the mechanical and molecular mechanisms that underlie this process. More broadly, our finding that activation of a joint formation program can be used to switch between the formation of bony processes and of new auxiliary bones provides a new perspective on plasticity during skeletal patterning and evolution.