The vertebrate skeleton forms predominantly by endochondral ossification (EO), where the cartilaginous model of the axial and appendicular skeleton, as well as of certain cranial bones, is replaced by bony trabeculae and marrow. The distinctive feature of this process is comprised of hypertrophic cartilage where EO initiates and collagen X is predominant.1 Emergence of hypertrophic cartilage defines each skeletal element where marrow forms. Since the marrow provides niches for blood cell differentiation, alterations in the cartilage-to-bone and marrow transition of EO may affect stromal and hematopoietic constituents. We demonstrate here that mice transgenic (Tg) for collagen X develop both skeletal and hematopoietic abnormalities, and that the latter likely arise as a consequence of disrupted collagen X function. These data reveal an unforeseen link between endochondral skeletogenesis and establishment of the marrow microenvironment prerequisite for hematopoiesis.During embryogenesis, EO initiates in cartilage with hypertrophy, and progresses by transforming a preexisting non-calcified avascular cartilage to a calcifiable one permissive to vascularization.