Endochondral ossification is the major process of long bone formation, and chondrogenesis is the final step of this process. Several studies have indicated that bone morphogenetic proteins (BMPs) are required for chondrogenesis and regulate multiple growth plate features. Abnormal BMP pathways lead to growth plate defects, resulting in osteochondrodysplasia. The SPARC-related modular calcium binding 2 (SMOC2) gene encodes an extracellular protein that is considered to be an antagonist of BMP signaling. In this study, we generated a mouse model by knocking-in the SMOC2 mutation (c.1076 T > G), which showed short-limbed dwarfism, reduced, disorganized, and hypocellular proliferative zones and expanded hypertrophic zones in tibial growth plates. To determine the underlying pathophysiological mechanism of SMOC2 mutation, we used knock-in mice to investigate the interaction between SMOC2 and the BMP–SMAD1/5/9 signaling pathway in vivo and in vitro. Eventually, we found that mutant SMOC2 could not bind to COL9A1 and HSPG. Furthermore, mutant SMOC2 inhibited BMP signaling by competitively binding to BMPR1B, which lead to defects in growth plates and short-limbed dwarfism in knock-in mice.