During cartilage formation and maintenance, the expression of chondrocyte-specific genes, such as those encoding type II collagen (COL2A1), aggrecan, and cartilage-derived retinoic acid sensitive protein (CD-RAP), is regulated by both activators and repressors that interact with the promoter or enhancer regions of these genes. Cascades of both positive and negative transcription factors have been found to determine developmental events in the embryonic growth plate. The high mobility group protein Sox9, which is required for COL2A1 transcription along with l-Sox5 and Sox6, plays a key role in cartilage formation and maintenance, while Sp1 and the coactivator, CBP/p300, are required for constitutive activity. The bHLH, HOX, SMAD, ETS, and STAT families consist of both positive and negative regulators that directly or indirectly influence COL2A1 and CD-RAP during chondrogenesis and chondrocyte hypertrophy. In osteoarthritis, activation of mature articular chondrocytes may result in recapitulation of these developmental events and phenotypic modulation by the associated transcription factors. Cytokine-induced transcription factors, including NF-κB, C/EBP, ETS, and AP-1 family members that activate catabolic and proinflammatory genes, may then suppress chondrocyte phenotype and cartilage repair mechanisms by inhibiting expression of cartilage-specific genes. This review will focus on the transcriptional regulation of COL2A1 and CD-RAP genes by factors involved in cartilage formation and homeostasis, as well as in inflammatory and catabolic events that adversely affect cartilage integrity.