BMPs regulate cartilage differentiation and have been approved for clinical use as stimulators of bone repair. BMP signaling is complex and there are multiple potential points of regulation, including modulation of Smad signaling, which is inhibited by both Smad6 and Smad7. In the current manuscript we assessed the expression and biological function of Smad6 during chondrocyte differentiation. We found that the induction of chondrocyte differentiation by BMP‐2 in chicken sternal embryonic chondrocytes was accompanied by a marked increase in Smad6 mRNA and protein levels. A morpholino antisense oligonucleotide complementary to Smad6 reduced the expression of Smad6 protein and enhanced the stimulatory effect of BMP‐2 on both colX and alkaline phosphatase activity. In contrast, over‐expression of Smad6 blocked BMP‐2 mediated induction of the type X collagen promoter, b2‐640 Luc. Therefore, expression studies as well as gain and loss of function experiments suggest that Smad6 participates in an important negative feedback loop whereby BMP‐2 mediated effects on chondrocyte differentiation are reduced by induction of Smad6. Additional studies are required to determine the extent to which this pathway participates in pathologic processes involving cartilage. © 2003 Orthopaedic Research Society. Published by Elsevier Science Ltd. All rights reserved.