Notch receptor plays a crucial role in proliferation and differentiation of many cell types. To elucidate the function of Notch signaling in osteogenesis, we transfected the constitutively active Notch1 (Notch intracellular domain, NICD) into two different osteoblastic mesenchymal cell lines, KusaA and KusaO, and examined the changes of their osteogenic potentials. In NICD stable transformants (KusaA(NICD) and KusaO(NICD)), osteogenic properties including alkaline phosphatase activity, expression of osteocalcin and type I collagen, and in vitro calcification were suppressed. Transient transfection of NICD attenuated the promoter activities of Cbfa1 and Ose2 element. KusaA was capable of forming trabecular bone-like tissues when injected into mouse abdomen, but this in vivo bone forming activity was significantly suppressed in KusaA(NICD). Osteoclasts were induced in the KusaA-derived bone-like tissues, but lacked in the KusaA(NICD)-derived tissues. These results suggest that Notch signaling suppresses the osteoblastic differentiation of mesenchymal progenitor cells.