Retinoic acid and thyroid hormone are known to play key roles in the regulation of endochondral ossification. However, the issue of whether these two hormones interact with each other to regulate bone functions remains to be established. We investigated how thyroid hormone and retinoic acid interact to regulate cells involved in endochondral bone formation. We demonstrate that thyroid hormone treatment stimulates differentiation of ATDC5 chondrocytes and promotes formation of mineralized nodules while retinoic acid treatment at high dose inhibits chondrocyte differentiation and formation of mineralized nodules. Furthermore, thyroid hormone induced mineralized nodule formation is inhibited by co-treatment with retinoic acid in ATDC5 cells. Dose response studies in ATDC5 cells showed that retinoic acid treatment caused a biphasic effect on ALP and osterix mRNA levels. At low dose, it increased expression levels and at high dose it decreased the expression levels of ALP and osterix genes. Since thyroid hormone action in the nucleus is known to be mediated via binding of thyroid hormone receptors either as homodimer or heterodimer with retinoic acid receptors to regulatory regions of target genes, our findings raise the possibility that the presence of retinoic acid may interfere with the differentiation promoting actions of thyroid hormone in chondrocytes by influencing nuclear proteins that are recruited to the thyroid hormone receptor complex. In conclusion, our findings suggest that the effect of retinoic acid treatment appears to be complex involving both stimulation and inhibition of differentiation depending on dose as well as differentiation status of cells.