Indian hedgehog (Ihh) was recently reported to be expressed in chondrocytes and to regulate chondrocyte differentiation. This report examined the expression of Ihh in osteoblastic cells and its regulation by calcitropic cytokines. We found that Ihh messenger RNA (mRNA) was expressed as a single 2.5-kilobase band at a modest level in rat osteoblastic osteosarcoma ROS17/2.8 cells. In sharp contrast to the previous observation of dpp regulation of hedgehog expression in Drosophila embryos, bone morphogenetic protein-2 did not affect Ihh expression in these cells. On the other hand, treatment with 2 ng/ml transforming growth factor-beta1 (TGFbeta1) increased the steady state level of Ihh mRNA 2- to 4-fold. Western blot analysis of the cell lysates using antisera also showed enhancement of the Ihh protein level by TGFbeta1 treatment. The effect of TGFbeta1 on Ihh mRNA abundance started within 3 h, peaked at 24 h and lasted at least 48 h after the initiation of the treatment. The effect of TGFbeta1 on the increase in Ihh mRNA was dose dependent, starting at 0.2 ng/ml and saturating at 2 ng/ml. Neither actinomycin D nor cycloheximide blocked this effect. Experiments using 5,6-dichloro-1-beta-D-ribofuranosylbenzimidazole showed an enhancement of Ihh mRNA stability by TGFbeta1, indicating the presence of posttranscriptional regulation. We then examined the effects of TGFbeta1 on Ihh mRNA in osteoblast-enriched cells isolated from neonatal rat calvariae. TGFbeta1 also enhanced Ihh mRNA expression in these cells. Our data indicate for the first time that Ihh is one of the members of the cytokines produced by osteoblastic cells and that the expression of Ihh is regulated posttranscriptionally by TGFbeta.