Runx2, a transcription factor, is essential for osteoblastic differentiation, bone formation, and maintenance. We examined the effect of Runx2 on transdifferentiation of 3T3-L1 preadipocytes into functional, mature osteoblasts. Forced expression of exogenous Runx2 using a retroviral gene-delivery system showed increases of alkaline phosphatase (ALP) activity and expression of the osteoblastic marker genes osteocalcin (OC), bone sialoprotein (BSP), and osterix (Osx), accompanied by low-level matrix mineralization. In contrast, adipocytic differentiation was completely blocked with downregulation of adipogenic transcription factors PPARγ2, C/EBPα, and C/EBPδ. Treatment of dexamethasone (Dex), a synthetic glucocorticoid, stimulated the formation of mineralized nodules in Runx2-overexpressing 3T3-L1 cells with increases of ALP, OC, BSP, and Osx expression. Here, we focused on a dual specific phosphatase, mitogen-activated protein kinase (MKP-1), since Dex significantly increased MKP-1 expression in Runx2-overexpressing 3T3-L1 cells. Forced expression of exogenous MKP-1 resulted in accumulation of robust matrix mineralization in parallel with induction of ALP activity and expression of OC, BSP, and Osx in Runx2-overexpressing 3T3-L1 cells. These results suggest that simultaneous overexpression of Runx2 and MKP-1 is effective for transdifferentiation of preadipocytes into fully differentiated bone-forming osteoblasts and provide a novel strategy for cell-based therapeutic applications requiring significant numbers of osteogenic cells to synthesize mineralized constructs for the treatment of large bone defects.