Atonal homolog 8 (Atoh8) is a transcription factor of the basic helix-loop-helix (bHLH) protein family, which is expressed in the cartilaginous elements of endochondral bones. To analyze its function during chondrogenesis we deleted Atoh8 in mice using a chondrocyte- (Atoh8flox/flox;Col2a1-Cre) and a germline- (Atoh8flox/flox;Prx1-Crefemale) specific Cre allele. In both strains, Atoh8 deletion leads to a reduced skeletal size of the axial and appendicular bones, but the stages of phenotypic manifestations differ. While we observed obviously shortened bones in Atoh8flox/flox;Col2a1-Cre mice only postnatally, the bones of Atoh8flox/flox;Prx1-Crefemale mice are characterized by a reduced bone length already at prenatal stages. Detailed histological and molecular investigations revealed reduced zones of proliferating and hypertrophic chondrocytes. In addition, Atoh8 deletion identified Atoh8 as a positive regulator of chondrocyte proliferation. As increased Atoh8 expression is found in the region of prehypertrophic chondrocytes where the expression of Ihh, a main regulator of chondrocyte proliferation and differentiation, is induced, we investigated a potential interaction of Atoh8 function and Ihh signaling. By activating Ihh signaling with Purmorphamine we demonstrate that Atoh8 regulates chondrocyte proliferation in parallel or downstream of Ihh signaling while it acts on the onset of hypertrophy upstream of Ihh likely by modulating Ihh expression levels.