Studies in vitro and in vivo have shown that glucocorticoids and sex steroids play an important role in bone physiology and pathophysiology. In this study we investigated glucocorticoid and sex steroid conversion in osteoblasts derived from lumbar vertebrae of adult male and female rats. Progesterone was converted to inactive 20alpha-OH-progesterone and the conversion at day 5 was 16-fold greater than that at day 13 in both sexes (male/ female, 2.7/1.7 and 0.16/0.10 nM/10(5)cells/24 h, respectively). The conversion of inactive androstenedione to active androgen testosterone in males and females was 1.2- and 2.4-fold greater at day 5 than at day 13, respectively (male/female, 0.40/0.70 and 0.34/0.30 nM/ 10 cells/24 h, respectively). These results suggest that osteoblasts possess 20alpha-hydroxysteroid dehydrogenase (HSD) and 17beta-HSD and that their activities are dependent on the stage of cell differentiation. At day 5, dehydroepiandrosterone was converted to androstenedione (male/female, 0.25/0.098 nM/10(5)cells/24 h), to 7alpha-OH-dehydroepiandrosterone (male/female, 0.49/0.39 nM/10(5)cells/24 h) and to 5-androstene-3beta,17beta-diol (male/female, 0.18/0.37 nM/10(5)cells/24 h), indicating the presence of 3beta-HSD, 7alpha-hydroxylase and 17beta-HSD, respectively. Both 3beta-HSD and 7alpha-hydroxylase activities declined with cell differentiation. Hormonally inactive cortisone was converted to active cortisol (male/female, 0.34/0.29 microM/10(6)cells/6 h) while conversion of cortisol to cortisone was not detectable, suggesting the presence of oxoreductase activity of 11beta-HSD-1. These results show, for the first time, the presence of 7alpha-hydroxylase and 20alpha-HSD in osteoblasts, and provide further evidence that osteoblasts metabolize a variety of steroid hormones and can thus regulate tissue responsiveness to them.