Although chondrogenesis and osteogenesis are considered as two separate processes during endochondral bone formation after birth, recent studies have demonstrated the direct cell transformation from chondrocytes into bone cells in postnatal bone growth. Here we use cell lineage tracing and multiple in vivo approaches to study the role of Bmpr1a in endochondrogenesis. Our data showed profound changes in skeletal shape, size and structure when Bmpr1a was deleted using Aggrecan-Cre ERT2 in early cartilage cells with a one-time tamoxifen injection. We observed the absence of lineage progression of chondrocyte-derived bone cells to form osteoblasts and osteocytes in metaphyses. Furthermore, we demonstrated the key contribution of growth plate chondrocytes and articular chondrocytes, not only for long bone growth, but also for bone remodeling. In contrast, deleting Bmpr1a in early osteoblasts with 3.6 Col 1-Cre had little impact on skeletal shape and size except for a sharp increase in osteoblasts and osteocytes, leading to a profound increase in bone volume. We conclude that chondrogenesis and osteogenesis are one continuous developmental and lineage-defined biological process, in which Bmpr1a signaling in chondrocytes is necessary for the formation of a pool or niche of osteoprogenitors that then contributes in a major way to overall bone formation and growth.