Osterix, a zinc finger transcription factor, is specifically expressed in osteoblasts and osteocytes of all developing bones. Because no bone formation occurs in Osx-null mice, Osterix is thought to be an essential regulator of osteoblast differentiation. We report that, in several mesenchymal and osteoblastic cell types, BMP-2 induces an increase in expression of the two isoforms of Osterix arising from two alternative promoters. We identified a consensus Sp1 sequence (GGGCGG) as Osterix binding regions in the fibromodulin and the bone sialoprotein promoters in vitro and in vivo. Furthermore, we show that Osterix is a novel substrate for p38 MAPK in vitro and in vivo and that Ser-73 and Ser-77 are the regulatory sites phosphorylated by p38. Our data also demonstrate that Osterix is able to increase recruitment of p300 and Brg1 to the promoters of its target genes fibromodulin and bone sialoprotein in vivo and that it directly associates with these cofactors through protein-protein interactions. Phosphorylation of Osterix at Ser-73/77 increased its ability to recruit p300 and SWI/SNF to either fibromodulin or bone sialoprotein promoters. We therefore propose that Osterix binds to Sp1 sequences on target gene promoters and that its phosphorylation by p38 enhances recruitment of coactivators to form transcriptionally active complexes.Bone is a highly dynamic tissue that is constantly remodeled throughout life. Bone remodeling activity is dependent on a delicate balance between osteoclast resorption and osteoblast new bone formation. Deregulation of these two activities unleashes pathological states such as osteoporosis and osteosclerosis. Both endochondral and intramembranous ossification depends on osteoblasts that are derived from pluripotent mesenchymal stem cells that, in response to various cellular and environmental signals, commit to the osteoblast phenotype. Among them, BMPs 5 are essential for commitment and differentiation to the osteoblast lineage; they promote osteoblast differentiation in vitro and in vivo, bone regeneration, and ectopic bone formation in vivo (1-3). The BMP signal is transduced through the binding to its heteromeric cell membrane receptors (4, 5). BMP binding to receptors results in the activation of the Smad family of transcription factors, which directly regulate target gene expression (6). BMP target genes include a growing number of osteoblastdetermining transcription factors. For instance, in vivo genetic evidence as well as osteogenic induction of bone marrow mesenchymal stem cells in vitro has identified several types of transcription factors such as Id1, homeodomain proteins such as Dlx3 and Dlx5, ATF4, Runx2, and Osterix (Osx) (7-9). Runx2 and Osx have been widely accepted as master osteogenic factors because neither Runx2-nor Osx-null mice form mature osteoblasts (10, 11). Osx contains a proline-and serine-rich transactivation domain located in the N-terminal part of the protein and three zinc fingers with homology to the Sp1/Kruppel transcription factor family. Osx express...