Late cartilage differentiation during endochondral bone formation is a multistep process. Chondrocytes transit through a differentiation cascade under the direction of environmental signals that either stimulate or repress progression from one step to the next. In human costal cartilage, chondrocytes reach very advanced stages of late differentiation and express collagen X. However, remodeling of the tissue into bone is strongly repressed. The second hypertrophy marker, alkaline phosphatase, is not expressed before puberty. Upon sexual maturity, both alkaline phosphatase and collagen X activity levels are increased and slow ossification takes place. Thus, the expression of the two hypertrophy markers is widely separated in time in costal cartilage. Progression of endochondral ossification in this tissue beyond the stage of hypertrophic cartilage appears to be associated with the expression of alkaline phosphatase activity. Costal chondrocytes in culture are stimulated by parathyroid hormone in a PTH/PTHrP receptor-mediated manner to express the fully differentiated hypertrophic phenotype. In addition, the hormone stimulates hypertrophic development even more powerfully through its carboxyterminal domain, presumably by interaction with receptors distinct from PTH/PTHrP receptors. Therefore, PTH can support late cartilage differentiation at very advanced stages, whereas the same signal negatively controls the process at earlier stages.