Bone cells and their precursors are sensitive to changes in their biomechanical environment. The importance of mechanical stimuli has been observed in bone homeostasis and osteogenesis, but the mechanisms responsible for osteogenic induction in response to mechanical signals are poorly understood. We hypothesized that compressive forces could exert an osteogenic effect on osteoblasts and act in a dose-dependent manner. To test our hypothesis, electrospun poly(epsilon-caprolactone) (PCL) scaffolds were used as a 3-D microenvironment for osteoblast culture. The scaffolds provided a substrate allowing cell exposure to levels of externally applied compressive force. Pre-osteoblasts adhered, proliferated and differentiated in the scaffolds and showed extensive matrix synthesis by scanning electron microscopy (SEM) and increased Young's modulus (136.45+/-9.15 kPa) compared with acellular scaffolds (24.55+/-8.5 kPa). Exposure of cells to 10% compressive strain (11.81+/-0.42 kPa) resulted in a rapid induction of bone morphogenic protein-2 (BMP-2), runt-related transcription factor 2 (Runx2), and MAD homolog 5 (Smad5). These effects further enhanced the expression of genes and proteins required for extracellular matrix (ECM) production, such as alkaline phosphatase (Akp2), collagen type I (Col1a1), osteocalcin/bone gamma carboxyglutamate protein (OC/Bglap), osteonectin/secreted acidic cysteine-rich glycoprotein (ON/Sparc) and osteopontin/secreted phosphoprotein 1 (OPN/Spp1). Exposure of cell-scaffold constructs to 20% compressive strain (30.96+/-2.82 kPa) demonstrated that these signals are not osteogenic. These findings provide the molecular basis for the experimental and clinical observations that appropriate physical activities or microscale compressive loading can enhance fracture healing due in part to the anabolic osteogenic effects.