All cells, including nonexcitable cells, maintain a discrete transmembrane potential ( V mem), and have the capacity to modulate V mem and respond to their own and neighbors’ changes in V mem. Spatiotemporal variations have been described in developing embryonic tissues and in some cases have been implicated in influencing developmental processes. Yet, how such changes in V mem are converted into intracellular inputs that in turn regulate developmental gene expression and coordinate patterned tissue formation, has remained elusive. Here we document that the V mem of limb mesenchyme switches from a hyperpolarized to depolarized state during early chondrocyte differentiation. This change in V mem increases intracellular Ca2+ signaling through Ca2+ influx, via CaV1.2, 1 of L-type voltage-gated Ca2+ channels (VGCCs). We find that CaV1.2 activity is essential for chondrogenesis in the developing limbs. Pharmacological inhibition by an L-type VGCC specific blocker, or limb-specific deletion of CaV1.2, down-regulates expression of genes essential for chondrocyte differentiation, including Sox9 , Col2a1 , and Agc1 , and thus disturbs proper cartilage formation. The Ca2+-dependent transcription factor NFATc1, which is a known major transducer of intracellular Ca2+ signaling, partly rescues Sox9 expression. These data reveal instructive roles of CaV1.2 in limb development, and more generally expand our understanding of how modulation of membrane potential is used as a mechanism of developmental regulation.