We present an overview of the concepts of tissue-specific transcriptional control mechanisms essential for development of the bone cell phenotype. BMP2 induced transcription factors constitute a network of activities and molecular switches for bone development and osteoblast differentiation. Among these regulators are Runx2 (Cbfa1/AML3), the principal osteogenic master gene for bone formation, as well as homeodomain proteins and osterix. Runx2 has multiple regulatory activities, including activation or repression of gene expression, and integration of biological signals from developmental cues, such as BMP/TGFbeta, Wnt and Src signaling pathways. Runx2 provides a new paradigm for transcriptional control by functioning as a principal scaffolding protein in nuclear microenvironments to control gene expression in response to physiologic signals (growth factors, cytokines and hormones). The protein serves as a hub for the coordination of activities essential for the expansion and differentiation of osteogenic lineage cells through the formation of co-regulatory protein complexes organized in subnuclear domains. Mechanisms by which Runx2 supports commitment to osteogenesis and determines cell fate involve its retention on mitotic chromosomes. Disruption of a unique protein module, the subnuclear targeting signal of Runx2, has profound effects on osteoblast differentiation and metastasis of cancer cells in the bone microenvironment. Runx2 target genes include regulators of cell growth control, components of the bone extracellular matrix, angiogenesis, and signaling proteins for development of the osteoblast phenotype and bone turnover. The specificity of Runx2 regulatory activities provides a basis for novel therapeutic strategies to correct bone disorders.