Transcriptional regulation of gene expression in vivo in bone, associated with normal development or skeletal disorders, to date, has not been studied. We report the successful isolation of nuclei that are transcriptionally active from normal and osteopetrotic rat bone. Transcription rates of cell growth and bone-related genes (including histone H4, c-fos, c-jun, TGF beta 1, beta 2 macroglobulin, collagen, fibronectin, osteocalcin, osteopontin, and tartrate resistant acid phosphatase) change as a function of calvarial development from birth to 6 weeks and are selectively modified in osteopetrotic animals. Additionally, nuclei isolated from intact bone yield promoter binding factors. Bone nuclei, which transcribe faithfully and contain the normal complement of nuclear protein factors, offer a powerful approach for investigating in vivo gene regulation in skeletal development and pathology.