Skeletal stem cells regulate bone growth and homeostasis by generating diverse cell types, including chondrocytes, osteoblasts and marrow stromal cells. The emerging concept postulates that there exists a distinct type of skeletal stem cell that is closely associated with the growth plate^1,2,3,4, which is a type of cartilaginous tissue that has critical roles in bone elongation5. The resting zone maintains the growth plate by expressing parathyroid hormone-related protein (PTHrP), which interacts with Indian hedgehog (Ihh) that is released from the hypertrophic zone^6,7,8,9,10, and provides a source of other chondrocytes¹¹. However, the identity of skeletal stem cells and how they are maintained in the growth plate are unknown. Here we show, in a mouse model, that skeletal stem cells are formed among PTHrP-positive chondrocytes within the resting zone of the postnatal growth plate. PTHrP-positive chondrocytes expressed a panel of markers for skeletal stem and progenitor cells, and uniquely possessed the properties of skeletal stem cells in cultured conditions. Cell-lineage analysis revealed that PTHrP-positive chondrocytes in the resting zone continued to form columnar chondrocytes in the long term;​ these chondrocytes underwent hypertrophy, and became osteoblasts and marrow stromal cells beneath the growth plate. Transit-amplifying chondrocytes in the proliferating zone—which was concertedly maintained by a forward signal from undifferentiated cells (PTHrP) and a reverse signal from hypertrophic cells (Ihh)—provided instructive cues to maintain the cell fates of PTHrP-positive chondrocytes in the resting zone. Our findings unravel a type of somatic stem cell that is initially unipotent and acquires multipotency at the post-mitotic stage, underscoring the malleable nature of the skeletal cell lineage. This system provides a model in which functionally dedicated stem cells and their niches are specified postnatally, and maintained throughout tissue growth by a tight feedback regulation system.