Delta-like 1 (Dlk1, also known as fetal antigen-1, FA1) is a member of Notch/Delta family that inhibits adipocyte and osteoblast differentiation; however, its role in chondrogenesis is still not clear. Thus, we overexpressed Dlk1/FA1 in mouse embryonic ATDC5 cells and tested its effects on chondrogenic differentiation. Dlk1/FA1 inhibited insulin-induced chondrogenic differentiation as evidenced by reduction of cartilage nodule formation and gene expression of aggrecan, collagen Type II and X. Similar effects were obtained either by using Dlk1/FA1-conditioned medium or by addition of a purified, secreted, form of Dlk1 (FA1) directly to the induction medium. The inhibitory effects of Dlk1/FA1 were dose-dependent and occurred irrespective of the chondrogenic differentiation stage: proliferation, differentiation, maturation, or hypertrophic conversion. Overexpression or addition of the Dlk1/FA1 protein to the medium strongly inhibited the activation of Akt, but not the ERK1/2, or p38 MAPK pathways, and the inhibition of Akt by Dlk1/FA1 was mediated through PI3K activation. Interestingly, inhibition of fibronectin expression by siRNA rescued the Dlk1/FA1-mediated inhibition of Akt, suggesting interaction of Dlk1/FA1 and fibronectin in chondrogenic cells. Our results identify Dlk1/FA1 as a novel regulator of chondrogenesis and suggest Dlk1/FA1 acts as an inhibitor of the PI3K/Akt pathways that leads to its inhibitory effects on chondrogenesis.