Skeletal tissues develop either by intramembranous ossification, where bone is formed within a soft connective tissue, or by endochondral ossification. The latter proceeds via cartilage anlagen, which through hypertrophy, mineralization, and partial resorption ultimately provides scaffolding for bone formation. Here, we describe a novel and essential mechanism governing remodeling of unmineralized cartilage anlagen into membranous bone, as well as tendons and ligaments. Membrane-type 1 matrix metalloproteinase (MT1-MMP)–dependent dissolution of unmineralized cartilages, coupled with apoptosis of nonhypertrophic chondrocytes, mediates remodeling of these cartilages into other tissues. The MT1-MMP deficiency disrupts this process and uncouples apoptotic demise of chondrocytes and cartilage degradation, resulting in the persistence of “ghost” cartilages with adverse effects on skeletal integrity. Some cells entrapped in these ghost cartilages escape apoptosis, maintain DNA synthesis, and assume phenotypes normally found in the tissues replacing unmineralized cartilages. The coordinated apoptosis and matrix metalloproteinase-directed cartilage dissolution is akin to metamorphosis and may thus represent its evolutionary legacy in mammals.