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The initiation of synovial joint development and subsequent differentiation of progenitor cells toward anatomically and functionally distinct joint tissues are not well understood, despite being highly relevant to joint health and disease. We generated a dual reporter mouse embryonic stem cell (mESC) line to quantify cells expressing growth differentiation factor five (Gdf5), an early marker of joint formation, and Prg4, a lubricating proteoglycan found in joint tissues. Transforming growth factor β (TGF-β) signaling was necessary and sufficient for the induction of Gdf5-RFP and Prg4-GFP. Inhibition of either Wnt or MAPK signaling significantly increased the induction of Gdf5-RFP, while activation of either pathway prohibited this induction. Single cell transcriptomics demonstrated the chondrogenic identity of Gdf5+ cells in in vitro cultures and in mouse embryonic limb buds. We validated the roles of these signaling pathways in joint-specific ex vivo limb bud cultures. Thus, this in vitro model enhances our understanding of joint development and offers new insights into potential therapeutic approaches for joint disorders.