Osteoblast stimulating factor-1 (OSF-1) stimulates in vitro proliferation and differentiation of osteoblastic cells, and its gene is expressed in the bone and brain tissues in mammals and amphibians. To evaluate the in vivo function of OSF-1 in bone metabolism, transgenic mice overexpressing the human osf-1 gene driven by the osteocalcin promoter were generated. Femoral bone mineral content was increased in transgenic mice relative to wild-type controls as estimated by ash assay, depending on the transgene copy number per cell. In ovariectomized mice, bone mass loss due to estrogen deficiency was observed in both transgenic and control mice but bone mass was still higher in transgenic mice than in controls. Bone mass in ovariectomized transgenic mice was comparable to that in wild-type mice without ovariectomy. These observations indicate that OSF-1 may direct in vivo appositional bone formation by increasing osteoblast activity rather than decreasing osteoclast activity, suggesting a new way to treat osteoporosis with OSF-1. Copyright 1997 Academic Press.