Role of BMP signaling is crucial in the osteoblast differentiation and bone formation. BMP induces expression of Runx2, a master gene for osteogenesis, and cooperates with Runx2 in mature osteoblast to express target genes. These functions are suppressed by TGF-beta-induced Smad7 together with Smurf1 by various mechanisms, including degradation of type I receptor, Smadl/5, and Runx2. Bone remodeling is achieved by "coupling" of osteoblasts and osteoclasts. Although excess maturation and activation of osteoclasts is well described during inflammation, effect of inflammation to the osteoblast function is still unclear. Further exploration in this area thus might lead to discovery of novel therapeutic targets of inflammatory bone diseases.