Objective: While transforming growth factor β (TGFβ) signaling plays a critical role in chondrocyte metabolism, the TGFβ signaling pathways and target genes involved in cartilage homeostasis and the development of osteoarthritis (OA) remain unclear. Using an in vitro cell culture method and an in vivo mouse genetic approach, we undertook this study to investigate TGFβ signaling in chondrocytes and to determine whether Mmp13 and Adamts5 are critical downstream target genes of TGFβ signaling. Methods: TGFβ receptor type II (TGFβRII)-conditional knockout (KO) (TGFβRII Col2ER) mice were generated by breeding TGFβRII flox/flox mice with Col2-CreER-transgenic mice. Histologic, histomorphometric, and gene expression analyses were performed. In vitro TGFβ signaling studies were performed using chondrogenic rat chondrosarcoma cells. To determine whether Mmp13 and Adamts5 are critical downstream target genes of TGFβ signaling, TGFβRII/matrix metalloproteinase 13 (MMP-13)- and TGFβRII/ADAMTS-5-double-KO mice were generated and analyzed. Results: Inhibition of TGFβ signaling (deletion of the Tgfbr2 gene in chondrocytes) resulted in up-regulation of Runx2, Mmp13, and Adamts5 expression in articular cartilage tissue and progressive OA development in TGFβRIICol2ER mice. Deletion of the Mmp13 or Adamts5 gene significantly ameliorated the OA-like phenotype induced by the loss of TGFβ signaling. Treatment of TGFβRIICol2ER mice with an MMP-13 inhibitor also slowed OA progression. Conclusion: Mmp13 and Adamts5 are critical downstream target genes involved in the TGFβ signaling pathway during the development of OA.