Short-term exposure to smokeless tobacco extracts (STE) reportedly inhibits osteoblast metabolism. The objective of this study was to determine the effects of serial dilutions of a water-soluble extract of smokeless tobacco on osteoblast proliferation and their potential to form and mineralize bone nodules. STE significantly stimulated cell proliferation when diluted 10(2)-10(4) times; 10(3) and 10(4) dilutions produced the greatest effect. 10(2)-10(4) STE dilutions significantly increased alkaline phosphatase activity at day 7 but 10(6) STE dilutions significantly decreased it. 10(3) and 10(4) dilutions significantly increased bone nodule formation, but inhibited their mineralization. In contrast, 10(5) and 10(6) dilutions significantly decreased bone nodule formation, but increased their mineralization. Stimulation of in vitro bone nodule formation by STE was similar to that produced by 10(-7) M insulin-like growth factor 1 (IGF-1) in vivo. Heat and acid treatment of STE significantly reduced its beneficial effect on cell proliferation, suggesting that a peptide within STE may be responsible for enhancement of osteogenic cell proliferation. Thus, STE may contain a peptide capable of significantly stimulating osteoblast proliferation, differentiation and metabolism, similar to the effects of IGF-1. This peptide could have potential therapeutic benefits.