Achondroplasia (ACH) is a rare genetic disease where bone growth is abnormal and cartilage does not correctly form. The main characteristics of ACH are limb shortening and short stature. ACH is caused by single point mutations in the fibroblast growth factor receptor 3 (FGFR3), which leads to hyperactive receptor signaling. Cyclin-dependent kinase 8 (CDK8), which belongs to the transcription-related CDK family, has been reported to play an important role in regulating fundamental cellular processes including proliferation, survival, and differentiation. However, the functional role and underlying mechanisms of CDK8 on progression of ACH remain largely unknown. Here, we demonstrated that the pharmacological inhibition by CDK8 kinase inhibitor KY-065 significantly restores the impairment of chondrogenic differentiation and hypertrophy in mesenchymal cells derived from ACH model mice in vitro. Mechanistically, we found that KY-065 corrects the overactivation of STAT1 signaling via inhibition of CDK8 kinase activity, which in turn rescues the abnormalities of chondrogenesis in mesenchymal cells. Moreover, daily subcutaneous administration of KY-065 significantly increased bone growth of femur in ACH model mice. These findings indicate that CDK8 inhibition could be a potential therapeutic approach for ACH and other FGFR-related skeletal dysplasias.