Transient receptor potential melastatin-subfamily member 7 (TRPM7) is a bifunctional protein containing a kinase fused to an ion channel permeated with cations, including Ca²⁺ and Mg²⁺. Trpm7-null mice show embryonic lethality. Paired related homeobox 1 (Prx1) is expressed in undifferentiated mesenchymal cells such as the progenitor cells of both chondrocytes and osteoblasts involved in limb skeleton formation. Prx1-Cre-dependent Trpm7 mesenchymal-deleted mice were generated to examine the role of TRPM7 in bone development. We found that Prx1-Cre;​Trpm7^fl/fl mice had shortened bones and impaired trabecular bone formation. Trabecular bone parameters, such as the bone volume (BV/TV), and trabecular number (Tb.N), were decreased in Prx1-Cre;​Trpm7^fl/fl. The cortical bone parameters of cortical bone area (Ct.Ar) and cortical bone thickness (Ct.Th) were also down-regulated in these mice. The bone formation rate in Prx1-Cre;​Trpm7^fl/fl mice was unchanged, but the hypertrophic area and cell size of the zone were smaller, and the expression of Col2a1, Col10a1 and Mmp13 was downregulated compared with control mice. These findings suggest impaired chondrogenesis in Prx1-Cre;​Trpm7^fl/fl mice compared to control mice. The receptor activator of nuclear factor-kappa B ligand (RANKL) expression was increased, and RANKL-positive cells and osteoclasts were markedly accumulated in the boundary region between the growth plate and trabecular bone. In contrast, TRPM7 KR mice, which are kinase-dead mutants in which the TRPM7 ion channel function has not been altered, showed no marked differences in trabecular or cortical bone parameters compared to wild-type mice. These findings suggest that TRPM7 is critical as a cation channel rather than as a kinase in bone development via the regulation of chondrogenesis.