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Abstract Background Skeletal development and maintenance are complex processes known to be coordinated by multiple genetic and epigenetic signaling pathways. However, the role of long non-coding RNAs (lncRNAs), a class of crucial epigenetic regulatory molecules, has been under explored in skeletal biology. Results Here we report a young patient with short stature, hypothalamic dysfunction and mild macrocephaly, who carries a maternally inherited 690 kb deletion at Chr.1q24.2 encompassing a noncoding RNA gene, DNM3OS, embedded on the opposite strand in an intron of the DYNAMIN 3 (DNM3) gene. We show that lncRNA DNM3OS sustains the proliferation of chondrocytes independent of two co-cistronic microRNAs miR-199a and miR-214. We further show that nerve growth factor (NGF), a known factor of chondrocyte growth, is a key target of DNM3OS-mediated control of chondrocyte proliferation. Conclusions This work demonstrates that DNM3OS is essential for preventing premature differentiation of chondrocytes required for bone growth through endochondral ossification.