Cyclin-dependent kinase 8 (CDK8) is a transcription-related CDK family member implicated in the regulation of bone homeostasis, and we recently demonstrated that our internally developed CDK8 inhibitor KY-065 can prevent postmenopausal osteoporosis in a mouse model. Achondroplasia (ACH), the most common form of genetic dwarfism in humans, is caused by a gain-of-function mutation in fibroblast growth factor receptor 3 (FGFR3), a receptor tyrosine kinase that activates downstream mitogen-activated protein kinase (MAPK) and signal transducer and activator of transcription (STAT) signaling pathways. The first precision drug approved for the treatment of ACH in children, the C-type natriuretic peptide analog vosoritide, antagonizes the MAPK pathway, while there are currently no effective and safe medications targeting the STAT1 pathway. Here, we demonstrate that KY-065 rescues impaired chondrogenesis and stunted long bone growth in the Fgfr3Ach mouse model of ACH. KY-065 inhibited CDK8 with high affinity in vitro by competing with ATP. The CDK8 expression and STAT1Ser727 phosphorylation were upregulated in chondrocytes isolated from ACH model mice, and KY-065 repressed its phosphorylation and restored normal chondrogenic differentiation without affecting MAPK activation. Moreover, daily administration of 10 mg/kg KY-065 to Fgfr3Ach mice (yielding a peak concentration of 22.0 ± 1.47 μM in plasma) resulted in significant elongation of long bone and improved growth plate cytoarchitecture. Collectively, these findings identify the CDK8 in chondrocytes as a potential therapeutic target for ACH and KY-065 as a promising candidate drug treatment for this debilitating skeletal disease.