Chicken ovalbumin upstream promoter-transcription factor II (COUP-TFII) is an orphan nuclear receptor of the steroid-thyroid hormone receptor superfamily. COUP-TFII is widely expressed in multiple tissues and organs throughout embryonic development and has been shown to regulate cellular growth, differentiation, and organ development. However, the role of COUP-TFII in osteoblast differentiation has not been systematically evaluated. In the present study, COUP-TFII was strongly expressed in multipotential mesenchymal cells, and the endogenous expression level decreased during osteoblast differentiation. Overexpression of COUP-TFII inhibited bone morphogenetic protein 2 (BMP2)-induced osteoblastic gene expression. The results of alkaline phosphatase, Alizarin Red staining, and osteocalcin production assay showed that COUP-TFII overexpression blocks BMP2-induced osteoblast differentiation. In contrast, the down-regulation of COUP-TFII synergistically induced the expression of BMP2-induced osteoblastic genes and osteoblast differentiation. Furthermore, the immunoprecipitation assay showed that COUP-TFII and Runx2 physically interacted and COUP-TFII significantly impaired the Runx2-dependent activation of the osteocalcin promoter. From the ChIP assay, we found that COUP-TFII repressed DNA binding of Runx2 to the osteocalcin gene, whereas Runx2 inhibited COUP-TFII expression via direct binding to the COUP-TFII promoter. Taken together, these findings demonstrate that COUP-TFII negatively regulates osteoblast differentiation via interaction with Runx2, and during the differentiation state, BMP2-induced Runx2 represses COUP-TFII expression and promotes osteoblast differentiation.