Transcription factor, Nkx3.2, is a member of the NK family of developmental genes and is expressed during embryogenesis in a variety of mammalian model organisms, including chicken and mouse. It was first identified in Drosophila as the Bagpipe (bap) gene, where it has been demonstrated to be essential during formation of the midgut musculature. However, mammalian homolog Nkx3.2 has been shown to play a significant role in axial and limb skeletogenesis; in particular, the human skeletal disease, spondylo-megaepiphyseal-metaphyseal dysplasia (SMMD), is associated with mutations of the Nkx3.2 gene. In this review, we highlight the role of Nkx3.2 during musculoskeletal development, with an emphasis on the factor’s role in determining chondrogenic cell fate and its subsequent role in endochondral ossification and chondrocyte survival.