Neural EGFL like 1 (Nell-1) is essential for chondrogenic differentiation, maturation, and regeneration. Our previous studies have demonstrated that Nell-1‘s pro-chondrogenic activities are predominantly reliant upon runt-related transcription factor 3 (Runx3)-mediated Indian hedgehog (Ihh) signaling. Here, we identify the nuclear factor of activated T-cells 1 (Nfatc1) as the key transcriptional factor mediating the Nell-1 → Runx3 signal transduction in chondrocytes. Using chromatin immunoprecipitation assay, we were able to determine that Nfatc1 binds to the -833--810 region of the Runx3-promoter in response to Nell-1 treatment. By revealing the Nell-1 → Nfatc1 → Runx3→Ihh cascade, we demonstrate the involvement of Nfatc1, a nuclear factor of activated T-cells, in chondrogenesis, while providing innovative insights into developing a novel therapeutic strategy for cartilage regeneration and other chondrogenesis-related conditions. © 2018 by the authors. Licensee MDPI, Basel, Switzerland.