Development of the craniofacial skeleton requires interactions between progenitor cells and the collagen-rich extracellular matrix (ECM). The mediators of these interactions are not well-defined. Mutations in the discoidin domain receptor 2 gene (DDR2), which encodes a non-integrin collagen receptor, are associated with human craniofacial abnormalities, such as midface hypoplasia and open fontanels. However, the exact role of this gene in craniofacial morphogenesis is not known. As will be shown, Ddr2-deficient mice exhibit defects in craniofacial bones including impaired calvarial growth and frontal suture formation, cranial base hypoplasia due to aberrant chondrogenesis and delayed ossification at growth plate synchondroses. These defects were associated with abnormal collagen fibril organization, chondrocyte proliferation and polarization. As established by localization and lineage-tracing studies, Ddr2 is expressed in progenitor cell-enriched craniofacial regions including sutures and synchondrosis resting zone cartilage, overlapping with GLI1 + cells, and contributing to chondrogenic and osteogenic lineages during skull growth. Tissue-specific knockouts further established the requirement for Ddr2 in GLI +skeletal progenitors and chondrocytes. These studies establish a cellular basis for regulation of craniofacial morphogenesis by this understudied collagen receptor and suggest that DDR2 is necessary for proper collagen organization, chondrocyte proliferation, and orientation.