Osteogenic protein-1 (OP-1 or BMP-7) stimulates new bone formation in vivo and induces cell proliferation and differentiation of osteoblasts in vitro. In the present study, we examined effects of OP-1 on the expression of vascular endothelial growth factor (VEGF) in primary cultures of fetal rat calvaria (FRC) cells. OP-1 increased the steady-state level of VEGF mRNA by about 3-fold in an OP-1 concentration- and time-dependent manner. The increase in VEGF mRNA level depended on transcription and was sensitive to cell replication. The VEGF mRNA stability was unaffected. The mRNA levels for both types of VEGF receptors, Flk-1 and Flt-1 were low but detectable in FRC cells by RT-PCR and were not changed by OP-1. Inhibition of VEGF synthesis and function by antisense oligonucleotide and by suramin, respectively arrested the OP-1-induced alkaline phosphatase activity and mineralized bone nodule formation. Together with published studies of VEGF on vascular endothelial cells which are usually found in close proximity to osteoblastic cells in vivo, these results suggest that VEGF participates in the OP-1-induced osteogenesis by taking part in bone cell differentiation and by promoting angiogenesis at the site of bone formation.