Osteoblasts and their precursors respond to specific cytokines, growth factors, and hormones. One facet of this response includes the secretion of additional cytokines, some of which are part of the circuitry involved in the regulation of osteoblast and osteoclast function. Therefore, understanding which cytokines are able to activate osteoblastic cells and the consequences of that activation are central to understanding normal and pathologic bone remodeling. Oncostatin M (OSM) is a glycoprotein belonging to a new subfamily of cytokines related by sequence and structural homology and the use of the signal transducing receptor component gp130. Osteoblastic cells secrete and respond to leukemia-inhibiting factor (LIF) both in vitro and in vivo, suggesting that LIF is an autocrine regulatory factor. OSM is closely related to LIF, and therefore we hypothesized that OSM should regulate the function of cells in the osteoblastic lineage. Primary neonatal murine or fetal rat calvarial osteoblastic cultures were treated with OSM or LIF and a series of biochemical and biological parameters were determined. In these cultures, OSM induced proliferation, collagen synthesis, and interleukin-6 secretion, whereas it inhibited alkaline phosphatase activity. Bone resorption was also inhibited by OSM. These data represent the first report of OSM's effects on bone cell function and indicate that, like some other members of the LIF/interleukin-6 subfamily, OSM has potent bone regulatory activity.