Induction of matrix maturation and mineralization in calcified tissues is important for patients with primary bone tumors and other bone deficiencies, e.g., osteoporosis. For the former it signifies a better prognosis in osteosarcoma, and for the latter it might improve bone remodeling. In the present study we exposed osteosarcoma cells (Saos2), normal bone cells, and marrow stroma to two different tyrosine kinase (TK) inhibitors: AG-555 and AG-1478. These tyrphostins differ in their effect on signal transduction downstream to the TK receptor (RTK): AG-1478 inhibits src family TKs whereas AG-555 inhibits nuclear TKs. We found that both tyrphostins at 50 microM increased specific alkaline phosphatase (ALP) activity in Saos2 cells. AG-555 abrogated mineralization whereas AG-1478 increased it. Similarly, in human bone-derived cell cultures the same dose of tyrphostins had an opposing effect on mineralization but, in contrast to AG-555, AG-1478 positively selected cells with ALP activity. These tyrphostins also differed in their effect on rat marrow stromal cells. AG-555 decreased cell counts unselectively, whereas the decreased cell counts by AG-1478 resulted in selection of osteoprogenitor cells as indicated by a concordant increase in specific ALP activity. The effect of a lower dose of AG-1478, 5 microM, on the increase in mineralization exceeded its own efficiency in selecting cells with specific ALP activity. Our results indicate that AG-1478 selects and preserves the osteoblastic phenotype, at doses moderately higher than those required to induce mineralization, and substantially higher than the doses required for RTK inhibition. Identification of downstream molecular targets for AG-1478, in marrow stromal cells, might prove useful in designing more selective drugs, capable of separating proliferative from differentiation-inducing activities.