The formation of bone tissue involves multiple activities of the osteoblast. The combined application of molecular, biochemical, histochemical and ultrastructural approaches has defined stages in the development of the osteoblast phenotype with each subpopulation of cells exhibiting unique morphologic and functional properties in relation to the ordered deposition of the mineralized bone extracellular matrix (ECM). Peak levels of expressed genes reflect a maturational sequence of osteoblast growth and differentiation characterized by three principal periods: proliferation, ECM maturation and mineralization. A plethora of new information in the past several years provides the basis for insight into molecular mechanisms regulating the development and activities of differentiating osteoblasts. These new concepts will be discussed within the context of understanding cellular responses of bone tissue. To be considered are the following: 1) maturational stages of the osteoblast reflected by the selective expression of transcription factors (e.g., oncogenes, cyclins, homeodomain proteins) and phenotypic genes that provide signals for differentiation through the osteoblast lineage; 2) role of the extracellular matrix in mediating osteoblast growth and differentiation; 3) osteoblast stage specific responses to physiologic mediators (e.g., growth factors and hormones); 4) the developmentally regulated expression and selective responses of osteoblast phenotypic genes are supported by cooperative, synergistic and/or antagonistic activities at multiple basal and enhancer or suppressor sequences in gene promoters; and 5) deregulation of these control mechanisms in transformed osteoblasts and osteosarcoma cells.