This report documents osteoblast differentiation in vitro, as demonstrated by the 50–100× increase of proteins which are known markers of the osteoblast phenotype. Collagen type I and osteocalcin synthesis and accumulation, alkaline phosphatase activity, and matrix calcification show similar temporal relationships that are analogous to those seen during in vivo bone development. Chicken embryonic osteoblast progenitor cells were selected by initial growth at low densities in minimal medium. Upon subcultivation into nutrient-enriched medium at higher cell densities, near homogeneous populations of osteoblasts were obtained as demonstrated by the greater than 80% enrichment of cells positive for alkaline phosphatase activity. A comparison was made between cells grown in the presence or absence of 10 mM β-glycerolphosphate (β-GPO₄), a chemical stimulant of matrix calcification, as a function of time. Cultures treated with β-GPO₄ showed visible calcification at Day 12 when culture monolayers became confluent. By Day 30, numerous large foci of calcification were visible and a 20-fold increase in calcium (Ca) content was observed. In contrast, untreated cultures had only a 3-fold increase in Ca content with many smaller diffuse areas of calcification. DNA, RNA, and total protein levels were nearly identical between the two cultures, indicating that β-GPO₄ had no marked effect on either cell proliferation or transcriptional activity. The major collagen type produced by either culture was type I, with no detectable type III as determined by CNBr peptide mapping and delayed reduction analysis. Alkaline phosphatase activity showed a rapid ∼50-fold induction by Day 18 and remained elevated in control cultures. However, cultures treated with β-GPO₄ demonstrated a rapid 80% decline of enzyme activity after 18 days. In contrast, total osteocalcin levels showed a 100-fold induction by Day 18 and remained elevated in both control and β-GPO₄-treated cultures throughout the time period examined. While the overall levels of osteocalcin were the same in β-GPO₄-treated and untreated cultures, 2- to 5-fold more osteocalcin was associated with the more mineralized matrices of the β-GPO₄-treated cultures. In order to confirm the association of osteocalcin with areas of mineralization, co-localization of mineral to osteocalcin and collagen was carried out by combining vital labeling with tetracycline and immunofluorescent staining with anti-osteocalcin and anti-collagen antibodies. Both collagen and osteocalcin showed strong localization with areas of mineralization. This culture system defined the expression of specific markers of osteoblast function during differentiation and their relationships to matrix calcification. Thus, these osteoblast cultures provide a unique model in which to study the regulation of bone-specific proteins and genes during osteoblast differentiation and matrix calcification.