Osterix/Sp7, a member of the Sp1 transcription factor family, plays an essential role in bone formation and osteoblastogenesis. Although Osterix has been shown to be induced by BMP2 in a mesenchymal cell line, the molecular basis of the regulation, expression and function of Osterix during osteoblast differentiation, is not fully understood. Thus we examined the role of BMP2 signaling in the regulation of Osterix using the mesenchymal cell lines C3H10T1/2 and C2C12. Osterix overexpression induced alkaline phosphatase activity and osteocalcin expression in C2C12 cells and stimulated calcification of murine primary osteoblasts. Considering that Runx2 overexpression induces Osterix, these results suggest that Osterix functions as downstream of Runx2. Surprisingly, BMP2 treatment induced Osterix expression and alkaline phosphatase activity in mesenchymal cells derived from Runx2-deficient mice. Furthermore, overexpression of Smad1 and Smad4 up-regulated Osterix expression, and an inhibitory Smad, Smad6, markedly suppressed BMP2-induced Osterix expression in the Runx2-deficient cells. Moreover, overexpression of a homeobox gene, Msx2, which is up-regulated by BMP2 and promotes osteoblastic differentiation, induced Osterix expression in the Runx2-deficient cells. Knockdown of Msx2 clearly inhibited induction of Osterix by BMP2 in the Runx2-deficient mesenchymal cells. Interestingly, microarray analyses using the Runx2-deficient cells revealed that the role of Osterix was distinct from that of Runx2. These findings suggest that Osterix is regulated via both Runx2-dependent and -independent mechanisms, and that Osterix controls osteoblast differentiation, at least in part, by regulating the expression of genes not controlled by Runx2.