There is a worldwide epidemic of skeletal diseases causing not only a public health issue but also accounting for a sizable portion of healthcare expenditures. The vertebrate skeleton is known to be formed by mesenchymal cells condensing into tissue elements (patterning phase) followed by their differentiation into cartilage (chondrocytes) or bone (osteoblasts) cells within the condensations. During the growth and remodeling phase, bone is formed directly via intramembranous ossification or through a cartilage to bone conversion via endochondral ossification routes. The canonical pathway of the endochondral bone formation process involves apoptosis of hypertrophic chondrocytes followed by vascular invasion that brings in osteoclast precursors to remove cartilage and osteoblast precursors to form bone. However, there is now an emerging role for chondrocyte-to-osteoblast transdifferentiation in the endochondral ossification process. Although the concept of "transdifferentiation" per se is not recent, new data using a variety of techniques to follow the fate of chondrocytes in different bones during embryonic and post-natal growth as well as during fracture repair in adults have identified three different models for chondrocyte-to-osteoblast transdifferentiation (direct transdifferentiation, dedifferentiation to redifferentiation, and chondrocyte to osteogenic precursor). This review focuses on the emerging models of chondrocyte-to-osteoblast transdifferentiation and their implications for the treatment of skeletal diseases as well as the possible signaling pathways that contribute to chondrocyte-to-osteoblast transdifferentiation processes.