Transcription factors regulate tissue-specific differentiation of pluripotent mesenchyme to osteoblast (OB), myoblast (MB), and other lineages. Osterix (Osx) is an essential transcription factor for bone development because knockout results in lack of a mineralized skeleton. The proximal Osx promoter contains numerous binding sequences for MyoD and 14 repeats of a binding sequence for Myf5. These basic helix-loop-helix (bHLH) transcription factors have a critical role in MB differentiation and muscle development. We tested the hypothesis that bHLH transcription factors also support OB differentiation through regulation of Osx. Transfection of a MyoD expression vector into two primitive mesenchymal cell lines, C3H/10T1/2 and C2C12, stimulated a 1.2-kb Osx promoter-luciferase reporter 70-fold. Myf5 stimulated the Osx promoter 6-fold. Deletion analysis of the promoter revealed that one of three proximal bHLH sites is essential for MyoD activity. The Myf5 repeat conferred 60% of Myf5 activity with additional upstream sequence required for full activity. MyoD bound the active bHLH sequence and its 3'-flanking region, as shown by EMSA and chromatin immunoprecipitation assays. Real-time PCR revealed that primitive C2C12 and C3H/10T1/2 cells, pre-osteoblastic MC3T3 cells, and undifferentiated primary marrow stromal cells express the muscle transcription factors. C2C12 cells, which differentiate to MB spontaneously and form myotubules, were treated with bone morphogenetic protein 2 (BMP-2) to induce OB differentiation. BMP-2 stimulated expression of Osx and the differentiation marker alkaline phosphatase and blocked myotubule development. BMP-2 suppressed the muscle transcription factor myogenin, but expression of MyoD and Myf5 persisted. Silencing of MyoD inhibited BMP-2 stimulation of Osx and blocked the later appearance of bone alkaline phosphatase. MyoD support of Osx transcription contributes to early OB differentiation.