Nacre implanted in vivo in bone is osteogenic suggesting that it may possess factor(s) which stimulate bone formation. The present study was undertaken to test the hypothesis that nacre can induce mineralization by human osteoblasts in vitro. Nacre chips were placed on a layer of first passage human osteoblasts. None of the chemical inducers generally required to obtain bone formation in vitro was added to the cultures. Osteoblasts proliferated and were clearly attracted by nacre chips to which they attached. Induction of mineralization appeared preferentially in bundles of osteoblasts surrounding the nacre chips. Three-dimensional nodules were formed by a dense osteoid matrix with cuboidal osteoblasts at the periphery and osteocytic-like cells in the center. These nodules contained foci with features of mineralized structures and bone-like structures, both radiodense to X-ray. Active osteoblasts (e.m.) with abundant rough endoplasmic reticulum, extrusion of collagen fibrils and budding of vesicles were observed. Matrix vesicles induced mineral deposition. Extracellular collagen fibrils appeared cross-banded and electrodense indicating mineralization. These results demonstrate that a complete sequence of bone formation is reproduced when human osteoblasts are cultured in the presence of nacre. This model provides a new approach to study the steps of osteoblastic differentiation and the mechanisms of induction of mineralization.