Breast cancer preferentially metastasizes to bone. We therefore addressed the role of Notch signaling in osteoblast-cancer cell interactions and in bone metastasis. Human bone marrow osteoblasts selectively enhanced the expression of Notch3 and its ligand Jagged1 in human breast cancer cell lines. Osteoblasts also stimulated cancer cell colony formation in soft agar, which was reduced by a chemical inhibitor of Notch signaling and anti-transforming growth factor beta1 (TGFbeta1) antibody. TGFbeta1, a major prometastatic product of osteoblasts, also stimulated cancer cell Notch3 expression. Notch3 knockdown in the cancer cells by stable short hairpin RNA interference decreased the osteoblast- and TGFbeta1-stimulated colony formation as well as TGFbeta1-mediated Smad3/Smad2 phosphorylation; Jagged1 level was coordinately reduced. In addition, expression of snail, a regulator of epithelial-mesenchymal transition, and the mesenchymal markers fibronectin and vimentin was attenuated by reducing Notch3 levels. To study the role of Notch3 signaling in bone metastasis, cancer cells were inoculated into athymic mice, either into femoral bone marrow cavities or into the systemic circulation via the left ventricle. Compared with robust osteolysis in mice receiving control cells, osteolytic lesions were significantly reduced following inoculation of cells with constitutively reduced Notch3 expression. Taken together, our results suggest that enhanced Notch3 expression in breast cancer cells, triggered by osteoblasts and their secretion of TGFbeta1 in the bone marrow niche, may stand as a novel mechanism for promoting bone metastasis.