Achondroplasia is the most common genetic form of human dwarfism, for which there is presently no effective therapy. C-type natriuretic peptide (CNP) is a newly identified molecule that regulates endochondral bone growth through GC-B, a subtype of particulate guanylyl cyclase. Here we show that targeted overexpression of CNP in chondrocytes counteracts dwarfism in a mouse model of achondroplasia with activated fibroblast growth factor receptor 3 (FGFR-3) in the cartilage. CNP prevented the shortening of achondroplastic bones by correcting the decreased extracellular matrix synthesis in the growth plate through inhibition of the MAPK pathway of FGF signaling. CNP had no effect on the STAT-1 pathway of FGF signaling that mediates the decreased proliferation and the delayed differentiation of achondroplastic chondrocytes. These results demonstrate that activation of the CNP–GC-B system in endochondral bone formation constitutes a new therapeutic strategy for human achondroplasia.