Mucopolysaccharidosis VII (MPS VII) is a lysosomal storage disease in which deficiency in beta-glucuronidase results in glycosaminoglycan (GAG) accumulation in and around cells, causing shortened long bones through mechanisms that remain largely unclear. We demonstrate here that MPS VII mice accumulate massive amounts of the GAG chondroitin-4-sulfate (C4S) in their growth plates, the cartilaginous region near the ends of long bones responsible for growth. MPS VII mice also have only 60% of the normal number of chondrocytes in the growth plate and 55% of normal chondrocyte proliferation at 3weeks of age. We hypothesized that this reduction in proliferation was due to C4S-mediated overactivation of fibroblast growth factor receptor 3 (FGFR3). However, MPS VII mice that were FGFR3-deficient still had shortened bones, suggesting that FGFR3 is not required for the bone defect. Further study revealed that MPS VII growth plates had reduced tyrosine phosphorylation of STAT3, a pro-proliferative transcription factor. This was accompanied by a decrease in expression of leukemia inhibitory factor (LIF) and other interleukin 6 family cytokines, and a reduction in phosphorylated tyrosine kinase 2 (TYK2), Janus kinase 1 (JAK1), and JAK2, known activators of STAT3 phosphorylation. Intriguingly, loss of function mutations in LIF and its receptor leads to shortened bones. This suggests that accumulation of C4S in the growth plate leads to reduced expression of LIF and reduced STAT3 tyrosine phosphorylation, which results in reduced chondrocyte proliferation and ultimately shortened bones.