FHL2, a molecule that interacts with many integrins and transcription factors, was found to play an important role in osteoblast differentiation. Overexpression of FHL2 increases the accumulation of osteoblast differentiation markers and matrix mineralization, whereas FHL2 deficiency results in inhibition of osteoblast differentiation and decreased bone formation.Introduction: Integrin-matrix interaction plays a critical role in osteoblast function. It has been shown that the cytoplasmic domains of integrin  subunits mediate signal transduction induced by integrin-matrix interaction. We reasoned that the identification of proteins interacting with -cytoplasmic tails followed by analysis of the function of these proteins would enhance our understanding on integrin signaling and the roles of these proteins in osteoblast activities. Materials and Methods: Yeast two hybrid assay was used to identify proteins interacting with the cytoplasmic domain of integrin 5 subunit. The association of these proteins with integrin ␣v5 was confirmed by confocal analysis and co-immunoprecipitation. A stable MC3T3-E1 cells line overexpressing Four and Half Lim Protein 2 (FHL2) and mouse osteoblasts deficient in FHL2 were used to study the roles of FHL2 in osteoblast differentiation and bone formation. Matrix protein expression was determined by mRNA analysis and Western blotting. Matrix mineralization was detected by Alizarin red staining. Alkaline phosphatase activity was also measured. CT was used to determine bone histomorphometry. Results and Conclusions: FHL2 and actin-binding proteins, palladin and filamin A, were identified as proteins interacting with 5 cytoplasmic domain. FHL2 co-localized with ␣v5 at the focal adhesion sites in association with palladin and filamin A. FHL2 was also present in nuclei. Osteoblasts overexpressing FHL2 exhibited increased adhesion to and migration on matrix proteins. Conversely, FHL2 stimulation of CREB activity was dependent on integrin function because it was inhibited by Gly-Arg-Gly-Asp-Ser (GRGDS) peptide. The expression of osteoblast differentiation markers and Msx2 was upregulated, and bone matrix mineralization was increased in FHL2 overexpressing cells. In contrast, FHL2-deficient bone marrow cells and osteoblasts displayed decreased osteoblast colony formation and differentiation, respectively, compared with wildtype cells. Moreover, FHL2-deficient female mice exhibited greater bone loss than the wildtype littermates after ovariectomy. Thus, FHL2 plays an important role in osteoblast differentiation and bone formation.