During endochondral ossification, chondrocytes embed themselves in a proteoglycan-rich matrix during the proliferation-maturation transition. Accumulating evidence shows that proteoglycans are essential components for chondrocyte proliferation and differentiation. When we conditionally inactivated FAM20B (Family with sequence similarity 20 member-B), which is a newly identified xylose kinase essential for glycosaminoglycan (GAG) formation on the protein core of proteoglycans, from the dental mesenchyme using Osr2-Cre, which is also strongly expressed in joint cartilage, we found chondrosarcoma in the knee joint and remarkable defects of postnatal ossification in the long bones. Mechanistic analysis revealed that the defects were associated with gain of function in multiple signaling pathways in the epiphyseal chondrocytes, such as those derived by WNT, BMP, and PTHrP/IHH molecules, suggesting that the FAM20B-catalyzed proteoglycans are critical mediators for a signaling balance in the regulatory network controlling chondrocyte differentiation and proliferation. In particular, we demonstrated that the WNT inhibitor was able to rescue part of the bone defects in Osr2-Cre;Fam20B(fl/fl) mice, indicating that FAM20B-catalyzed proteoglycans regulate postnatal endochondral ossification partially through the mediation of WNT signaling.