Both the Wnt/β-catenin and Ihh signaling pathways play essential roles in crucial aspects of endochondral ossification: osteoblast differentiation,chondrocyte proliferation and hypertrophy. To understand the genetic interaction between these two signaling pathways, we have inactivated theβ-catenin gene and upregulated Ihh signaling simultaneously in the same cells during endochondral skeletal development using β-catenin and patched 1 floxed alleles. We uncovered previously unexpected roles of Ihh signaling in synovial joint formation and the essential function of Wnt/β-catenin signaling in regulating chondrocyte survival. More importantly, we found that Wnt and Ihh signaling interact with each other in distinct ways to control osteoblast differentiation, chondrocyte proliferation, hypertrophy, survival and synovial joint formation in the developing endochondral bone. β-catenin is required downstream of Ihh signaling and osterix expression for osteoblast differentiation. But in chondrocyte survival, β-catenin is required upstream of Ihh signaling to inhibit chondrocyte apoptosis. In addition, Ihh signaling can inhibit chondrocyte hypertrophy and synovial joint formation independently ofβ-catenin. However, there is a strong synergistic interaction between Wnt/β-catenin and Ihh signaling in regulating synovial joint formation.