Lbh is thought to act as a transcriptional cofactor and is highly conserved among species. Here we show that Lbh is expressed in chondrocytes, cells of the perichondrium, and the primary spongiosa in fetal growth plates of mice and chickens. Lbh overexpression in chick wings, using the RCAS-retroviral vector strategy, results in shortened skeletal elements and delayed hypertrophic chondrocyte maturation and bone formation. Additionally, osteoclast and endothelial cell invasion are delayed in the Lbh-overexpressing bones. Finally, we find a dramatic suppression of Runx2 and VEGF mRNAs in chondrocytes and osteoblasts that overexpress Lbh. Strikingly, this abnormal bone development in infected limbs can be rescued by concurrent overexpression of Runx2. These results suggest that during endochondral bone formation, Lbh may negatively regulate vascular invasion and formation of the early ossification center at least in part by interfering with Runx2 and/or VEGF expression.