We investigated the molecular mechanisms underlying the transition between immature and mature chondrocytes downstream of TGF-beta and canonical Wnt signals. We used two developmentally distinct chondrocyte models isolated from the caudal portion of embryonic chick sternum or chick growth plates. Lower sternal chondrocytes exhibited immature phenotypic features, whereas growth plate-extracted cells displayed a hypertrophic phenotype. TGF-beta significantly induced beta-catenin in immature chondrocytes, whereas it repressed it in mature chondrocytes. TGF-beta further enhanced canonical Wnt-mediated transactivation of the Topflash reporter expression in lower sternal chondrocytes. However, it inhibited Topflash activity in a time-dependent manner in growth plate chondrocytes. Our immunoprecipitation experiments showed that TGF-beta induced Sma- and Mad-related protein 3 interaction with T-cell factor 4 in immature chondrocytes, whereas it inhibited this interaction in mature chondrocytes. Similar results were observed by chromatin immunoprecipitation showing that TGF-beta differentially shifts T-cell factor 4 occupancy on the Runx2 promoter in lower sternal chondrocytes vs. growth plate chondrocytes. To further determine the molecular switch between immature and hypertrophic chondrocytes, we assessed the expression and regulation of Twist1 and Runx2 in both cell models upon treatment with TGF-beta and Wnt3a. We show that Runx2 and Twist1 are differentially regulated during chondrocyte maturation. Furthermore, whereas TGF-beta induced Twist1 in mature chondrocytes, it inhibited Runx2 expression in these cells. Opposite effects were observed upon Wnt3a treatment, which predominates over TGF-beta effects on these cells. Finally, overexpression of chick Twist1 in mature chondrocytes dramatically inhibited their hypertrophy. Together, our findings show that Twist1 may be an important regulator of chondrocyte progression toward terminal maturation in response to TGF-beta and canonical Wnt signaling.