Thyroid hormones exert a profound effect on development, growth, and metabolism of skeleton. In the present study, we evaluated the effect of thyroxine (T4) on the terminal differentiation of mesenchymal cell lines, C3H10T1/2 and rib growth plate chondrocytes in three-dimensional pellet culture. T4 (30ng/ml) stimulated the expressions of type II and X collagens, alkaline phosphatase (ALP) activity. On the other hand, the expression of chondrogenic transcription factor Sox9 in the T4 treatment group decreased significantly compared to the control group. T4 downregulates Sox9 and promotes hypertrophy. After day 7, T4 increases dramatically synthesis of type X collagen mRNA, ALP activity, and cellular hypertrophy. Thus, T4 acts directly on chondrocytes. In conclusion, we demonstrated that T4 enhances the cellular and molecular events of terminal differentiation and hypertrophy of chondrocytes in the three-dimensional cultures.