ABSTRACT. Tumor necrosis factor-a (TNF-a) stimulates osteoclast differentiation and suppresses osteoblast differentiation, leading to bone loss and decreased bone mass in local inflammation areas in patients with rheumatoid arthritis. The growth factor progranulin (PGRN) is expressed in various types of cells and play crucial roles in the pathogenesis of atherosclerosis and arthritis by blocking TNF-a. Here, we investigated the role of PGRN in blocking TNF-a-mediated inhibition of osteoblast differentiation and the regulatory mechanism. C2C12 stem cell was induced by bone morphogenetic protein-2 (BMP-2) for osteoblast differentiation. A significant increase in ALP activity (P < 0.001), as well as the expression of ColI, Ocn, and Bsp in the induced cells (P < 0.01 and P < 0.001) were observed; the marker gene expression and ALP activity were inhibited by TNF-a (P < 0.01 and P < 0.001). PGRN significantly blocks the TNF-a-mediated inhibition of osteoblast differentiation, evidenced by the ALP activity (P < 0.05 and 2 N. Wang et al.Genetics and Molecular Research 15 (3): gmr.15038126 P < 0.01), Alizarin red staining, the expression of ColI, Ocn, and Bsp (P < 0.05 and P < 0.01) and the osteoblast key transcription factor gene Runx2 (P < 0.01), Osx (P < 0.05), and ATF4 (P < 0.05). Mechanical study indicated that PGRN significantly blocks the TNF-a-mediated stimulation of NF-kB signaling (P < 0.01 and P < 0.001). PGRN exerts a protective effect on osteoblast differentiation in an inflammatory environment. Thus, we concluded that the treatment of osteoblasts with PGRN could be used in the future to prevent or treat rheumatoid arthritis-associated bone loss.