Introduction: The transcription factor activating enhancer binding protein 2 epsilon (AP-2 epsilon) was recently shown to be expressed during chondrogenesis as well as in articular chondrocytes of humans and mice. Furthermore, expression of AP-2 epsilon was found to be upregulated in affected cartilage of patients with osteoarthritis (OA). Despite these findings, adult mice deficient for AP-2 epsilon (Tfap2e(-/-)) do not exhibit an obviously abnormal cartilaginous phenotype. We therefore analyzed embryogenesis of Tfap2e(-/-) mice to elucidate potential transient abnormalities that provide information on the influence of AP-2 epsilon on skeletal development. In a second part, we aimed to define potential influences of AP-2 epsilon on articular cartilage function and gene expression, as well as on OA progression, in adult mice. Methods: Murine embryonic development was accessed via in situ hybridization, measurement of skeletal parameters and micromass differentiation of mesenchymal cells. To reveal discrepancies in articular cartilage of adult wild-type (WT) and Tfap2e(-/-) mice, light and electron microscopy, in vitro culture of cartilage explants, and quantification of gene expression via real-time PCR were performed. OA was induced via surgical destabilization of the medial meniscus in both genotypes, and disease progression was monitored on histological and molecular levels. Results: Only minor differences between WT and embryos deficient for AP-2 epsilon were observed, suggesting that redundancy mechanisms effectively compensate for the loss of AP-2 epsilon during skeletal development. Surprisingly, though, we found matrix metalloproteinase 13 (Mmp13), a major mediator of cartilage destruction, to be significantly upregulated in articular cartilage of adult Tfap2e(-/-) mice. This finding was further confirmed by increased Mmp13 activity and extracellular matrix degradation in Tfap2e(-/-) cartilage explants. OA progression was significantly enhanced in the Tfap2e(-/-) mice, which provided evidence for in vivo relevance. This finding is most likely attributable to the increased basal Mmp13 expression level in Tfap2e(-/-) articular chondrocytes that results in a significantly higher total Mmp13 expression rate during OA as compared with the WT. Conclusions: We reveal a novel role of AP-2 epsilon in the regulation of gene expression in articular chondrocytes, as well as in OA development, through modulation of Mmp13 expression and activity.