Mesenchymal chondrosarcoma affects adolescents and young adults, and most cases usually have theHEY1::NCOA2fusion gene. However, the functional role of HEY1-NCOA2 in the development and progression of mesenchymal chondrosarcoma remains largely unknown. This study aimed to clarify the functional role of HEY1-NCOA2 in transformation of the cell of origin and induction of typical biphasic morphology of mesenchymal chondrosarcoma. We generated a mouse model for mesenchymal chondrosarcoma by introducingHEY1-NCOA2into mouse embryonic superficial zone (eSZ) followed by subcutaneous transplantation into nude mice.HEY1-NCOA2expression in eSZ cells successfully induced subcutaneous tumors in 68.9% of recipients, showing biphasic morphologies and expression ofSox9, a master regulator of chondrogenic differentiation. ChIP sequencing analyses indicated frequent interaction between HEY1-NCOA2 binding peaks and active enhancers. Runx2, which is important for differentiation and proliferation of the chondrocytic lineage, is invariably expressed in mouse mesenchymal chondrosarcoma, and interaction between HEY1-NCOA2 and Runx2 is observed using NCOA2 C-terminal domains. AlthoughRunx2knockout resulted in significant delay in tumor onset, it also induced aggressive growth of immature small round cells. Runx3, which is also expressed in mesenchymal chondrosarcoma and interacts with HEY1-NCOA2, replaced the DNA-binding property of Runx2 only in part. Treatment with the HDAC inhibitor panobinostat suppressed tumor growth both in vitro and in vivo, abrogating expression of genes downstream of HEY1-NCOA2 and Runx2. In conclusion,HEY1::NCOA2expression modulates the transcriptional program in chondrogenic differentiation, affecting cartilage-specific transcription factor functions.