Osteoblasts are the primary cells responsible for bone formation and are thought to originate from mesenchymal osteoprogenitor cells within skeletal tissues. To elucidate the osteoblastic differentiation process, fetal rat calvariae (FRC) were enzymatically digested and fractionated to provide an osteoprogenitor-enriched cell population. The third fraction of cells from the five sequential digestions tested showed a significant osteogenic response to dexamethasone (Dex), a well-known differentiation hormone, which was demonstrated by high alkaline phosphatase activity early in culture and enhanced calcium deposition and bone nodule formation in late stage cultures. These data indicate that fraction three contains a large number of osteoprogenitor cells. During the osteoblastic differentiation of the third fraction of FRC cells, the formation of collagen cross-links (pyridinoline and deoxypyridinoline) was time-dependently accelerated with the accumulation of collagens, which coincided with an onset of mineralization of the cultures, i.e., calcium deposition and bone nodule formation. Moreover, noncollagenous matrix proteins, bone sialoprotein and osteocalcin, were also increased at both mRNA and protein level in Dex-treated cultures with advancing culture periods. Further examination for mRNA expression of bone morphogenetic proteins (BMPs) and TGF-β1 revealed a notable elevation in BMP-6 mRNA expression on days 3 and 10, and no significant change in TGF-β1 expression. These observations suggested that the progressive formation of collagen cross-links, production of noncollagenous proteins, and up regulation of BMP-6 mRNA play an important role in the osteoblastic differentiation process of osteoprogenitor cells isolated from FRC. This culture system provides us a suitable model for in vitro bone formation.