The AML/CBFA family of runt homology domain (rhd) transcription factors regulates expression of mammalian genes of the hematopoietic lineage. AML1, AML2 and AML3 are the three AML genes identified to date which influence myeloid cell growth and differentiation. Recently AML-related proteins were identified in an osteoblast-specific promoter binding complex that functionally modulates bone-restricted transcription of the osteocalcin gene. In the present study we demonstrate that in primary rat osteoblasts AML-3 is the AML family member present in the osteoblast-specific complex. Antibody specific for AML-3 completely supershifts this complex, in contrast to antibodies with specificity for AML-1 or AML-2, AML-3 is present as a single 5.4 kb transcript in bone tissues. To establish the functional involvement of AML factors in osteoblast differentiation, we pursued antisense strategies to alter expression of rhd genes. Treatment of osteoblast cultures with rhd antisense oligonucleotides significantly decreased three parameters which are linked to differentiation of normal diploid osteoblasts: the representation of alkaline phosphatase-positive cells, osteocalcin production, and the formation of mineralized nodules. Our findings indicate that AML-3 is a key transcription factor in bone cells and that the activity of rhd proteins is required for completion of osteoblast differentiation.