The perichondrium, a structure made of undifferentiated mesenchymal cells surrounding growth plate cartilage, regulates chondrocyte maturation through poorly understood mechanisms. Analyses of loss- and gain-of-function models show that Twist-1, whose expression in cartilage is restricted to perichondrium, favors chondrocyte maturation in a Runx2-dependent manner. Runx2, in turn, enhances perichondrial expression of Fgf18, a regulator of chondrocyte maturation. Accordingly, compound heterozygous embryos for Runx2 and Fgf18 deletion display the same chondrocyte maturation phenotype as Fgf18-null embryos. This study identifies a transcriptional basis for the inhibition of chondrocyte maturation by perichondrium and reveals that Runx2 fulfills antagonistic functions during chondrogenesis.