Chondrogenesis is a multistep pathway in which multipotential mesenchymal stem cells (MSC) differentiate into chondrocytes. The transcription factor Sox9 (SRY-related high mobility group-Box gene 9) regulates chondrocyte differentiation and cartilage-specific expression of genes, such as Col2a1 (collagen type II alpha1). However, Sox9 expression is detected not only in chondrogenic tissue but also in nonchondrogenic tissues, suggesting the existence of a molecular partner(s) required for Sox9 to control chondrogenesis and chondrogenic gene expression. Here, we report identification of peroxisome proliferator-activated receptor gamma co-activator 1alpha (PGC-1alpha) as a coactivator for Sox9 during chondrogenesis. Expression of PGC-1alpha is induced at chondrogenesis sites during mouse embryonic limb development and during chondrogenesis in human MSC cultures. PGC-1alpha directly interacts with Sox9 and promotes Sox9-dependent transcriptional activity, suggesting that PGC-1alpha acts as a transcriptional coactivator for Sox9. Consistent with this finding, PGC-1alpha disruption in MSC by small interfering RNA inhibits Col2a1 expression during chondrogenesis. Furthermore, overexpression of both PGC-1alpha and Sox9 induced expression of chondrogenic genes, including Col2a1, followed by chondrogenesis in the MSC and developing chick limb. Together, our results suggest a transcriptional mechanism for chondrogenesis that is coordinated by PGC-1alpha.