To investigate the role of bone morphogenetic protein (BMP-2) in ossifying rat bone marrow stromal cell cultures, we determined the population of fibroblast-like stromal cells that expressed BMP-2 immunocytochemically (anti-rhBMP-2 monoclonal antibody), and compared that to alkaline phosphatase (AP) and collagen synthesis formed in culture over a 4-week period in control and dexamethasone-supplemented mineralizing media. In control media, the percentage of BMP-2-positive stromal cells (BMP-2(+)) increased from 12 to 25% within the first 4 days of culture. In mineralizing media, the level of BMP-2(+) cells was significantly increased (43-44%). The intensity of immunostaining gradually increased with time. The levels of AP were undetectable at 1 week in both control and mineralizing media, but increased gradually over the next 2 weeks and peaked at 3 weeks. ALP levels were significantly greater in cultures grown in mineralizing medium (P < 0.05 at 3 weeks, P < 0.01 at 4 weeks). Collagen synthesis peaked and was significantly greater at 3 weeks (P < 0.05) in cultures grown in mineralizing medium. The levels of AP and collagen synthesis most closely reflected the changes in the percentage of BMP-2(+) cells from 7 to 28 days. Though these changes may reflect a primary action of BMP-2 on marrow osteoprogenitor-like stromal cells, they do not exclude a mechanism that involves the induction of other members of the BMP family known to stimulate AP and collagen synthesis. We conclude that BMP-2 expression in cultures of fibroblast-like marrow stromal cells is enhanced when those cells are induced to become osteoblasts by exposure to dexamethasone.