TNF-alpha, a proinflammatory cytokine, inhibits osteoblast differentiation under diverse inflammatory conditions; however, the underlying mechanisms in terms of the TNF-alpha signaling pathway remain unclear. In this study, we examined the role of Msx2 in TNF-alpha-mediated inhibition of alkaline phosphatase (ALP) expression and the signaling pathways involved. TNF-alpha down-regulated ALP expression induced by bone morphogenetic protein 2 (BMP2) in C2C12 and Runx2(-/-)calvarial cells. Over-expression of Msx2 suppressed BMP2-induced ALP expression. Furthermore, TNF-alpha induced Msx2 expression, and the knockdown of Msx2 by small interfering RNAs rescued ALP expression, which was inhibited by TNF-alpha. TNF-alpha activated the NF-kappaB and the JNK pathways. Inhibition of NF-kappaB or JNK activation reduced the inhibitory effect of TNF-alpha on ALP expression, whereas TNF-alpha-induced Msx2 expression was only suppressed by the inhibition of the NF-kappaB pathway. Taken together, these results indicate that Msx2 mediates the inhibitory action of TNF-alpha on BMP2-regulated osteoblast differentiation and that the TNF-alpha-activated NF-kappaB pathway is responsible for Msx2 induction.