Primary cultures of calvarial derived normal diploid osteoblasts undergo a developmental expression of genes reflecting growth, extracellular matrix maturation, and mineralization during development of multilayered nodules having a bone tissue-like organization. Scanning electron microscopy of the developing cultures indicates the transition from the uniform distribution of cuboidal osteoblasts to multilayered nodules of smaller cells with a pronounced orientation of perinodular cells towards the apex of the nodule. Ultrastructural analysis of the nodule by transmission electron microscopy indicates that the deposition of mineral is confined to the extracellular matrix where cells appear more osteocytic. The cell body contains rough endoplasmic reticulum and golgi, while these intracellular organelles are not present in the developing cellular processes. To understand the regulation of temporally expressed genes requires an understanding of which genes are selectively expressed on a single cell basis as the bone tissue-like organization develops. In situ hybridization analysis using 35S labelled histone gene probes, together with 3H-thymidine labelling and autoradiography, indicate that greater than 98% of the pre-confluent osteoblasts are proliferating. By two weeks, both the foci of multilayered cells and internodular cell regions have down-regulated cell growth associated genes. Post-proliferatively, but not earlier, initial expression of both osteocalcin and osteopontin are restricted to the multilayered nodules where all cells exhibit expression. While total mRNA levels for osteopontin and osteocalcin are coordinately upregulated with an increase in mineral deposition, in situ hybridization has revealed that expression of osteocalcin and osteopontin occurs predominantly in cells associated with the developing nodules. In contrast, proliferating rat osteosarcoma cells (ROS 17/2.8) concomitantly express histone H4, along with osteopontin and osteocalcin. These in situ analyses of gene expression during osteoblast growth and differentiation at the single cell level establish that a population of proliferating calvarial-derived cells subsequently expresses osteopontin and osteocalcin in cells developing into multilayered nodules with a tissue-like organization.