Longitudinal bone growth is driven by endochondral ossification, a process in which cartilage tissue is generated by growth plate chondrocytes and then remodeled into bone by osteoblasts. In the postnatal growth plate, as hypertrophic chondrocytes approach the chondro-osseous junction, they may undergo apoptosis, or directly transdifferentiate into osteoblasts. The molecular mechanisms governing this switch in cell lineage are poorly understood. Here we show that the physiological downregulation of Sox9 in hypertrophic chondrocyte is associated with upregulation of osteoblast-associated genes (such as Mmp13, Cola1, Ibsp) in hypertrophic chondrocytes, before they enter the metaphyseal bone. In transgenic mice that continued to express Sox9 in all cells derived from the chondrocytic lineage, upregulation of these osteoblast-associated genes in the hypertrophic zone failed to occur. Furthermore, lineage tracing experiments showed that, in transgenic mice expressing Sox9, the number of chondrocytes transdifferentiating into osteoblasts was markedly reduced. Collectively, our findings suggest that Sox9 downregulation in hypertrophic chondrocytes promotes expression of osteoblast-associated genes in hypertrophic chondrocytes and promotes the subsequent transdifferentiation of these cells into osteoblasts.