Transcriptional regulation can be tightly orchestrated by epigenetic regulators. Among these, ubiquitin-like with PHD and RING finger domains 1 (Uhrf1) is reported to have diverse epigenetic functions, including regulation of DNA methylation. However, the physiological functions of Uhrf1 in skeletal tissues remain unclear. Here, we show that limb mesenchymal cell-specific Uhrf1 conditional knockout mice (Uhrf1^{ΔLimb/ΔLimb}) exhibit remarkably shortened long bones that have morphological deformities due to dysregulated chondrocyte differentiation and proliferation. RNA-seq performed on primary cultured chondrocytes obtained from Uhrf1^{ΔLimb/ΔLimb} mice showed abnormal chondrocyte differentiation. In addition, integrative analyses using RNA-seq and MBD-seq revealed that Uhrf1 deficiency decreased genome-wide DNA methylation and increased gene expression through reduced DNA methylation in the promoter regions of 28 genes, including Hspb1, which is reported to be an IL1-related gene and to affect chondrocyte differentiation. Hspb1 knockdown in cKO chondrocytes can normalize abnormal expression of genes involved in chondrocyte differentiation, such as Mmp13. These results indicate that Uhrf1 governs cell type-specific transcriptional regulation by controlling the genome-wide DNA methylation status and regulating consequent cell differentiation and skeletal maturation.