Stimulation of osteoblast differentiation from mesenchymal stem cells is a potential strategy for bone repair. Bone morphogenetic proteins (BMPs) that induce osteoblastic differentiation have been successfully used in humans to treat fractures. Here we outline a new approach to the stimulation of osteoblast differentiation using small molecules that stimulate BMP activity. We have identified the amiloride derivative phenamil as a stimulator of osteoblast differentiation and mineralization. Remarkably, phenamil acts cooperatively with BMPs to induce the expression of BMP target genes, osteogenic markers, and matrix mineralization in both mesenchymal stem cell lines and calvarial organ cultures. Transcriptional profiling of cells treated with phenamil led to the identification of tribbles homolog 3 (Trb3) as a mediator of its effects. Trb3 is induced by phenamil selectively in cells with osteoblastic potential. Both Trb3 and phenamil stabilize the expression of SMAD, the critical transcription factor in BMP signaling, by promoting the degradation of SMAD ubiquitin regulatory factor 1. Small interfering RNA-mediated knockdown of Trb3 blunts the effects of phenamil on BMP signaling and osteogenesis. Thus, phenamil induces osteogenic differentiation, at least in part, through Trb3-dependent promotion of BMP action. The synergistic use of small molecules such as phenamil along with BMPs may provide new strategies for the promotion of bone healing.