The osteochondroma is a common, benign, primary tumor of bone. A mechanism for its pathogenesis has not been identified, but loss of function of EXT genes is implicated in sporadic and hereditary multiple osteochondromas. Recent advances in the understanding of other molecular signaling pathways in the physis cast doubt on the latest pathogenetic theories. These advances are reviewed and used as the basis for a revised theory for pathogenesis: A clone of proliferating chondrocytes without functional EXT1 (or EXT2) expression fails to produce heparan sulfate; lack of heparan sulfate at the cell surface disrupts fibroblast growth factor signaling and Indian hedgehog diffusion, leading to focal overproliferation and adjacent bone collar deficiency, respectively; together these effects are proposed to contribute to osteochondroma pathogenesis.