Indian hedgehog (Ihh) is essential for chondrocyte proliferation/differentiation and osteoblast differentiation during prenatal endochondral bone formation. Ihh expression in postnatal chondrocytes has a non-redundant role in maintaining a growth plate and sustaining trabecular bone after birth. Loss of Ihh in postnatal chondrocytes results in fusion of the growth plate and a decrease in trabecular bone. In order to normalize this abnormal chondrocyte phenotype and to investigate whether a putative rescue of the growth plate anomalies is sufficient to correct the severe alterations in the bone, we expressed a constitutively active PTH/PTHrP receptor (an Ihh downstream target) in the chondrocytes of Col2 alpha 1-Cre ER; Ihh(dld) mice by mating Col2 alpha 1-Cre ER; Ihh(fl/fl) mice with Col2 alpha 1-constitutively active PTH/PTHrP receptor transgenic mice (Jansen, J). Col2 alpha 1-Cre ER; Ihh(f/f); J mice were then injected with tamoxifen at P0 to generate Col2 alpha 1-Cre ER; Ihh(d/d); J mice. In contrast with the previously reported growth plate phenotype of Col2 alpha 1-Cre ER; Ihh(d/d) mice that displayed ectopic chondrocyte hypertrophy at P7, growth plates of Col2 alpha 1-Cre ER; Ihh(d/d); J double mutants were well organized, and exhibited a gene expression pattern similar to the one of control mice. However, expression of osteoblast markers and Dkk1, a Wnt signaling target, remains decreased in the bone collar of Col2 alpha 1-Cre ER; Ihh(d/d); J mice when compared to control mice despite the rescue of abnormal chondrocyte differentiation. Moreover, proliferation of chondrocytes was still significantly impaired in Col2 alpha 1-Cre ER; Ihh(d/d); J mice, and this eventually led to the fusion of the growth plate at P14. In summary, we have demonstrated that expression of a Jansen receptor in chondrocytes was able to rescue abnormal chondrocyte differentiation but not impaired chondrocyte proliferation and the bone anomalies in mice lacking the Ihh gene in chondrocytes after birth. Taken together, our findings suggest that Ihh has both PTHrP-dependent and -independent functions during postnatal endochondral bone development.