GADD45beta (growth arrest- and DNA damage-inducible) interacts with upstream regulators of the JNK and p38 stress response kinases. Previously, we reported that the hypertrophic zone of the Gadd45beta(-/-) mouse embryonic growth plate is compressed, and expression of type X collagen (Col10a1) and matrix metalloproteinase 13 (Mmp13) genes is decreased. Herein, we report that GADD45beta enhances activity of the proximal Col10a1 promoter, which contains evolutionarily conserved AP-1, cAMP-response element, and C/EBP half-sites, in synergism with C/EBP family members, whereas the MMP13 promoter responds to GADD45beta together with AP-1, ATF, or C/EBP family members. C/EBPbeta expression also predominantly co-localizes with GADD45beta in the embryonic growth plate. Moreover, GADD45beta enhances C/EBPbeta activation via MTK1, MKK3, and MKK6, and dominant-negative p38alphaapf, but not JNKapf, disrupts the combined trans-activating effect of GADD45beta and C/EBPbeta on the Col10a1 promoter. Importantly, GADD45beta knockdown prevents p38 phosphorylation while decreasing Col10a1 mRNA levels but does not affect C/EBPbeta binding to the Col10a1 promoter in vivo, indicating that GADD45beta influences the transactivation function of DNA-bound C/EBPbeta. In support of this conclusion, we show that the evolutionarily conserved TAD4 domain of C/EBPbeta is the target of the GADD45beta-dependent signaling. Collectively, we have uncovered a novel molecular mechanism linking GADD45beta via the MTK1/MKK3/6/p38 axis to C/EBPbeta-TAD4 activation of Col10a1 transcription in terminally differentiating chondrocytes.