Estrogen plays a major role in bone mineral homeostasis, maintaining a balance between bone formation and bone resorption not only in women but also in men. Extraglandular aromatization of circulating androgen is the major source of estrogen in post-menopausal women and men. In order to assess the capacity of bone cells as a local source of estrogen, osteoblast-like cells (OLCs) were obtained from human fetal bone in mid-trimester by the explant method and by mechanical disaggregation. The integrity of OLCs was confirmed by their ability to produce alkaline phosphatase and osteocalcin in response to vitamin D3 and also by their ability to deposit mineral. Aromatase activity was assessed by the formation of estrone from [1,2,6,7-3H]androstenedione and by the release of tritium from [1beta-3H]androstenedione into [3H]water. Formation of estrone was confirmed by thin layer chromatography (TLC) in OLCs stimulated with dexamethasone (DEX) + oncostatin M. The aromatase activity was 10 x higher in non-passaged OLCs than in passaged cells in the presence or absence of the stimulants (DEX + IL-1beta). The apparent Km and Vmax estimated by the release of [3H]water was 5.8+/-0.6 nM and 10.8+/-1.4 pmol/mg per 6 h in the presence of DEX + IL-1beta. The effects of several stimulants on aromatase activity in OLCs were examined: serum, IL-1beta, TNFalpha and type I cytokines stimulated activity in the presence of DEX, while PMA and PMA + dibutyryl cAMP did not. To confirm the expression of aromatase in OLCs, cells prepared from periosteal membranes were also examined: These cells in culture possessed aromatase activity corresponding to OLCs prepared from bone specimens. Moreover, the fresh periosteum expressed aromatase at higher levels than that of metaphyseal specimens. The aromatase gene employs several different promoters (I.1, 1.2, I.3, I.4, I.5, I.6, 2a, 1f and PII) and the usage of these promoters is known to be controlled in a tissue-specific fashion. Accordingly, promoter usage in OLCs and fetal long bone (tibia) tissue was examined using the 5' rapid amplification of cDNA ends (RACE) technique. The major promoter used was I.4, not only in stimulated and non-stimulated OLCs, but also in fetal tibia. Some minor transcripts were also found: 1f (brain-specific promoter), PII and I.6 in OLCs stimulated by DEX + IL-1beta, and PII and I.3 in OLCs stimulated by DEX + serum. Fetal tibia also expressed I.3 (15%) and I.6 (10%). Thus, regulation and promoter usage in OLCs was quite different from other tissues known as estrogen sources including adipose tissue, ovary and placenta. These results suggest that bone is an extraglandular source of local estrogen which plays an important role in bone mineral metabolism through autocrine and paracrine actions.