Osterix, a zinc-finger transcription factor, is specifically expressed in osteoblasts and osteocytes of all developing bones. Because no bone formation occurs in Osterix null mice, Osterix is thought to be an essential regulator of osteoblast differentiation. We report that bone morphogenetic protein-2 (BMP-2) induces an increase in Osterix expression, which is mediated through a homeodomain sequence located in the proximal region of the Osterix promoter. Our results demonstrate that induction of Dlx5 by BMP-2 mediates Osterix transcriptional activation. First, BMP-2 induction of Dlx5 precedes the induction of Osterix. Second, Dlx5 binds to the BMP-responsive homeodomain sequences both in vitro and in vivo. Third, Dlx5 overexpression and knock-down assays demonstrate its role in activating Osterix expression in response to BMP-2. Furthermore, we show that Dlx5 is a novel substrate for p38 MAPK in vitro and in vivo and that Ser-34 and Ser-217 are the sites phosphorylated by p38. Phosphorylation at Ser-34/217 increases the transactivation potential of Dlx5. Thus, we propose that BMP activates expression of Osterix through the induction of Dlx5 and its further transcriptional activation by p38-mediated phosphorylation.Bone is a dynamic tissue that is constantly remodeled throughout life. Bone remodeling activity is dependent on a strict coupling mechanism of osteoclast resorption and new matrix deposition by osteoblasts, and an imbalance between these two activities leads to pathological states such as osteoporosis and osteosclerosis. Commitment to the osteoblast phenotype is ultimately controlled by a specific set of transcription factors activated by signals and regulatory pathways. Among them, bone morphogenetic protein (BMP) 5 signaling has been shown to be involved in bone regeneration and osteoblast differentiation in vitro and in vivo (1-3). BMP target genes include a growing number of tissue-determining transcription factors that promote differentiation of mesenchymal precursors toward the osseous cell phenotypes. For instance, osteogenic induction of bone marrow mesenchymal stem cells or premyogenic C2C12 cells has identified several types of transcription factors such as Id1, several homeodomain proteins, ATF4, the runt homology domain factor Runx2 (Cbfa1) and Osterix (Osx) (for review, see Refs. 4 -6). Runx2 and Osx have been widely accepted as master osteogenic factors since neither Cbfa1 nor Osx null mice form mature osteoblasts (7,8). Nakashima et al. (8) identified Osx as a zinc-finger SP1 family member induced by BMP-2 in C2C12 cells that is specifically expressed in osteoblasts and osteocytes of all developing bones. In Osx-null mice, no bone formation takes place, although Runx2 is expressed, suggesting that Osx acts downstream of Runx2 during bone development (8). It has been suggested that Runx2 would function from the commitment step to the point where osteochondroprogenitors appear, whereas Osx would have a role in the segregation of osteoblasts from osteochondroprogenitors (5). Supporting ...