Although genetic evidence demonstrated a requirement for Wnt5a during cartilage development, little is known about the mechanisms underlying Wnt5a-regulated chondrocyte growth and differentiation. We therefore investigated the signaling pathways by which Wnt5a influences chondrogenesis and differentiation to hypertrophy. Wnt5a treatment of chondroprogenitor cells increased chondrocyte hypertrophy and was associated with an increase in nuclear factor of activated T cells (NFAT) and a decrease in nuclear factor-κB (NF-κB) activation. In contrast, Wnt5a inhibited chondrocyte hypertrophy. This inhibition of hypertrophy occurred with the reciprocal signaling activation, in that a decrease in NFAT and an increase in NF-κB activation was observed. Furthermore, the increase in chondroprogenitor cell differentiation with Wnt5a treatment was blocked by calmodulin kinase or NFAT loss of function. In addition, the repression of chondrocyte hypertrophy observed was abrogated by NF-κB loss of function. Activation of the NFAT pathway downstream of Wnt5a also negatively regulated NF-κB activity, providing evidence of antagonism between these two pathways. Mechanistically, Wnt5a acts to increase chondrocyte differentiation at an early stage through calmodulin kinase /NFAT-dependent induction of Sox9. Conversely, Wnt5a represses chondrocyte hypertrophy via NF-κB-dependent inhibition of Runx2 expression. These data indicate that Wnt5a regulates chondrogenesis and chondrocyte hypertrophy in a stage-dependent manner through differential utilization of NFAT- and NF-κB-dependent signal transduction.