The maturation of immature chondrocytes to hypertrophic chondrocytes is regulated by parathyroid hormone-related peptide (PTHrP). We demonstrate that PTHrP or forskolin administration can block induction of collagen X-luciferase by exogenous Runx2, MEF2, and Smad1 in transfected chondrocytes. We have found that PTHrP/forskolin administration represses the transcriptional activity of MEF2 and that forced expression of MEF2-VP16 can restore expression of the collagen X reporter in chondrocytes treated with these agents. PTHrP/forskolin induces dephosphorylation of histone deacetylase 4 (HDAC4) phospho-S246, which decreases interaction of HDAC4 with cytoplasmic 14-3-3 proteins and promotes nuclear translocation of HDAC4 and repression of MEF2 transcriptional activity. We have found that forskolin increases the activity of an HDAC4 phospho-S246 phosphatase and that forskolin-induced nuclear translocation of HDAC4 was reversed by the protein phosphatase 2A (PP2A) antagonist, okadaic acid. Finally, we demonstrate that knockdown of PP2A inhibits forskolin-induced nuclear translocation of HDAC4 and attenuates the ability of this signaling molecule to repress collagen X expression in chondrocytes, indicating that PP2A is critical for PTHrP-mediated regulation of chondrocyte hypertrophy.