Osteogenin, a novel bone differentiation factor, was recently purified and characterized. We examined its effect on the proliferation and differentiation of MC3T3-E1 osteoblast-like cells. Cell proliferation was inhibited the first 48 h after addition of osteogenin, and this effect was independent of serum. Osteogenin did not influence the cell morphology. Alkaline phosphatase promptly increased in a dose and time-dependent manner and appeared to be specific. Treatment with TGF-beta 1 resulted in inhibition of alkaline phosphatase activity, and was reversed by osteogenin within 48 h. Cell cultures treated with osteogenin for 72 h after confluence became responsive to parathyroid hormone. Synthesis of collagenous proteins was stimulated by osteogenin. The present results demonstrate a significant influence of osteogenin on the differentiation of osteogenic phenotype in MC3T3-E1 cells in vitro.