Core-binding factor β (Cbfβ) is a subunit of the Cbf family of heterodimeric transcription factors, which plays a critical role in skeletal development through its interaction with the Cbfα subunits, also known as Runt-related transcription factors (Runxs). However, the mechanism by which Cbfβ regulates cartilage and bone development remains unclear. Existing Cbfβ-deficient mouse models cannot specify the role of Cbfβ in skeletal cell lineage. Herein, we sought to specifically address the role of Cbfβ in cartilage and bone development by using a conditional knockout (CKO) approach. A mesenchymal-specific Cbfβ CKO mouse model was generated by using the Dermo1-Cre mouse line to specifically delete Cbfβ in mesenchymal stem cells, which give rise to osteoblasts and chondrocytes. Surprisingly, the mutant mice had under-developed larynx and tracheal cartilage, causing alveolus defects that led to death shortly after birth from suffocation. Also, the mutant mice exhibited severe skeletal deformities from defective intramembranous and endochondral ossification, owing to delayed chondrocyte maturation and impaired osteoblast differentiation. Almost all bones of the mutant mice, including the calvariae, vertebrae, tibiae, femurs, ribs, limbs and sternums were defective. Importantly, we showed that Cbfβ was expressed throughout the skeleton during both embryonic and postnatal development, which explains the multiple-skeletal defects observed in the mutant mice. Consistently, Cbfβ deficiency impaired both chondrocyte proliferation and hypertrophy zone hypertrophy during growth-plate development in the long bones of mutant mice. Notably, Cbfβ, Runx1 and Runx2 displayed different expression patterns in the growth plates of the wild-type mice, indicating that Cbfβ/Runx1 complex and Cbfβ/Runx2 complex may regulate chondrocyte proliferation and hypertrophy, respectively, in a spatial and temporal manner. Cbfβ deletion in the mesenchymal progenitors affected bone development by dramatically down-regulating Collagen X (Col X) and Osterix (Osx) but had a dispensable effect on osteoclast development. Collectively, the results demonstrate that Cbfβ mediates cartilage and bone development by interacting with Runx1 and Runx2 to regulate the expressions of Col X and Osx for chondrocyte and osteoblast development. These findings not only reveal a critical role for Cbfβ in cartilage and bone development but also facilitate the design of novel therapeutic approaches for skeletal diseases.