Hypertrophic differentiation is not only the terminal process of endochondral ossification in the growth plate but is also an important pathological change in osteoarthritic cartilage. Collagen type II (COL2A1) was previously considered to be only a structural component of the cartilage matrix, but recently, it has been revealed to be an extracellular signaling molecule that can significantly suppress chondrocyte hypertrophy. However, the mechanisms by which COL2A1 regulates hypertrophic differentiation remain unclear. In our study, a Col2a1 p.Gly1170Ser mutant mouse model was constructed, and Col2a1 loss was demonstrated in homozygotes. Loss of Col2a1 was found to accelerate chondrocyte hypertrophy through the bone morphogenetic protein (BMP)-SMAD1 pathway. Upon interacting with COL2A1, integrin β1 (ITGB1), the major receptor for COL2A1, competed with BMP receptors for binding to SMAD1 and then inhibited SMAD1 activation and nuclear import. COL2A1 could also activate ITGB1-induced ERK1/2 phosphorylation and, through ERK1/2-SMAD1 interaction, it further repressed SMAD1 activation, thus inhibiting BMP-SMAD1-mediated chondrocyte hypertrophy. Moreover, COL2A1 expression was downregulated, while chondrocyte hypertrophic markers and BMP-SMAD1 signaling activity were upregulated in degenerative human articular cartilage. Our study reveals novel mechanisms for the inhibition of chondrocyte hypertrophy by COL2A1 and suggests that the degradation and decrease in COL2A1 might initiate and promote osteoarthritis progression.