We have previously demonstrated that Smurf2 is highly expressed in human osteoarthritis (OA) tissue, and overexpression of Smurf2 under the control of the type II collagen promoter (Col2a1) induces an OA-like phenotype in aged Col2a1-Smurf2 transgenic mice, suggesting that Smurf2 is located upstream of a signal cascade which initiates OA development. However, the factors downstream of Smurf2 in this signal cascade and how Smurf2-induced OA is initiated are largely unknown. In this study, we further characterized the phenotypic changes in Col2a1-Smurf2 transgenic and WT articular cartilage from the postnatal stage to adulthood. We found that the articular cartilage degeneration occurring at the cartilage surface in 6 month-old Col2a1-Smurf2 transgenic mice progressed from an expanded hypertrophic domain in the basal layer of the deep articular cartilage at 2.5 weeks of age, which may lead to an accelerated calcification and ectopic ossification of this region at 1 month of age, and aggregation and maturation of articular chondrocytes in the middle and deep zones at 2 months and 4.5 months of age, respectively. Furthermore, we discovered that ectopically expressed Smurf2 interacted with GSK-3beta and induced its ubiquitination and subsequent proteasomal degradation, and hence upregulated beta-catenin in Col2a1-Smurf2 transgenic chondrocytes ex vivo. It is therefore likely that Smurf2-mediated upregulation of beta-catenin through induction of proteasomal degradation of GSK-beta in chondrocytes may activate articular chondrocyte maturation and associated alteration of gene expression, the early events of OA.