Our laboratory and others have shown that a homeodomain protein binding site plays an important role in transcription of the Collal gene in osteoblasts. This suggests that homeodomain proteins have an important role in osteoblast differentiation. We have investigated the role of Dlx5 in osteoblastic differentiation. In situ hybridization studies indicated that Dlx5 is expressed in chick calvarial osteoblasts (cCOB) in vivo. Northern blot analysis indicated that Dlx5 expression in cultured cCOBs is induced concurrently with osteoblastic markers. To study the effect of overexpression of Dlx5 on osteoblast differentiation, we infected primary osteoblast cultures from 15-day-old embryonal chicken calvaria with replication competent retroviral vectors [RCASBP(A)] expressing Dlx5 or control replication competent avian splice acceptor brianhightiter polymerase subtype A [RCASBP(A)]. Expression of Collal, osteopontin, alkaline phosphatase, and osteocalcin messenger RNA (mRNA) occurred sooner and at higher levels in cultures infected with RCASBP(A)DLX5 than in RCASBP(A)-infected cultures. Mineralization of Dlx5-expressing cultures was evident by days 12-14, and RCAS-infected control osteoblasts did not begin to mineralize until day 17. Dlx5 also stimulated osteoblastic differentiation of calvarial cells that do not normally undergo osteoblastic differentiation in vitro. Our results suggest that Dlx5 plays an important role in inducing calvarial osteoblast differentiation.