Multiple hereditary exostoses (MHE) is one of the most common skeletal dysplasias, exhibiting the formation of multiple cartilage-capped bony protrusions (osteochondroma) and characteristic bone deformities. Individuals with MHE carry heterozygous loss-of-function mutations in Ext1 or Ext2 , genes which together encode an enzyme essential for heparan sulfate synthesis. Despite the identification of causative genes, the pathogenesis of MHE remains unclear, especially with regard to whether osteochondroma results from loss of heterozygosity of the Ext genes. Hampering elucidation of the pathogenic mechanism of MHE, both Ext1 +/− and Ext2 +/− heterozygous mutant mice, which mimic the genetic status of human MHE, are highly resistant to osteochondroma formation, especially in long bones. To address these issues, we created a mouse model in which Ext1 is stochastically inactivated in a chondrocyte-specific manner. We show that these mice develop multiple osteochondromas and characteristic bone deformities in a pattern and a frequency that are almost identical to those of human MHE, suggesting a role for Ext1 LOH in MHE. Surprisingly, however, genotyping and fate mapping analyses reveal that chondrocytes constituting osteochondromas are mixtures of mutant and wild-type cells. Moreover, osteochondromas do not possess many typical neoplastic properties. Together, our results suggest that inactivation of Ext1 in a small fraction of chondrocytes is sufficient for the development of osteochondromas and other skeletal defects associated with MHE. Because the observed osteochondromas in our mouse model do not arise from clonal growth of chondrocytes, they cannot be considered true neoplasms.