Abstract Background The majority of our bones develop through the process of endochondral ossification that involves chondrocyte proliferation and hypertrophic differentiation in the cartilage growth plate. A large number of growth factors and hormones have been implicated in the regulation of growth plate biology, however, less is known about the intracellular signaling pathways involved. PI3K/Akt has been identified as a major regulator of cellular proliferation, differentiation and death in multiple cell types. Results and Discussion Employing an organ culture system of embryonic mouse tibiae and LY294002, a pharmacological inhibitor of PI3K, we show that inhibition of the pathway results in significant growth reduction, demonstrating that PI3K is required for normal endochondral bone growth in vitro. PI3K inhibition reduces the length of the proliferating and particularly of the hypertrophic zone. Studies with organ cultures and primary chondrocytes in micromass culture show delayed hypertrophic differentiation of chondrocytes and increased apoptosis in the presence of LY294002. Surprisingly, PI3K inhibition had no strong effect on IGF1-induced bone growth, but partially blocked the anabolic effects of C-type natriuretic peptide. Conclusion Our data demonstrate an essential role of PI3K signaling in chondrocyte differentiation and as a consequence of this, in the endochondral bone growth process.