A null mutation in the SOST gene is associated with sclerosteosis, an inherited disorder characterized by a high bone mass phenotype. The protein product of the SOST gene, sclerostin, is a bone morphogenetic protein (BMP) antagonist that decreases osteoblast activity and reduces the differentiation of osteoprogenitors. We sought to delineate the mechanism by which sclerostin modulated osteoblastic function by examining the effects of the protein on differentiating cultures of human mesenchymal stem cells (hMSC). Sclerostin significantly decreased alkaline phosphatase (ALP) activity and the proliferation of hMSC cells. In addition, hMSC cells treated with sclerostin displayed a marked increase in caspase activity. Elevated levels of fragmented histone-associated DNA in these cells were detected by ELISA and by TUNEL staining. Other BMP antagonists including noggin, Chordin, Gremlin, and Twisted gastrulation did not affect caspase activity. The sclerostin-mediated increase in caspase activity was blocked by caspase-1 and caspase-3 inhibitors. Sclerostin-induced changes in ALP activity and the survival of hMSC cells were partially restored by BMP-6, suggesting the involvement of additional growth factors. These findings show that sclerostin selectively controls the apoptosis of bone cells. The ability of sclerostin to interact with important growth factors such as BMPs likely serves as the basis by which it modulates the survival of osteoblasts. By making these growth factors unavailable for cell function, sclerostin promotes the apoptosis of bone cells, providing a novel level of control in the regulation of bone formation.