Src-null mice have higher bone mass because of decreased bone resorption and increased bone formation, whereas Abl-null mice are osteopenic, because of decreased bone formation. Compound I, a potent inhibitor of Src in an isolated enzyme assay (IC(50) 0.55 nM) and a Src-dependent cell growth assay, with lower activity on equivalent Abl-based assays, potently, but biphasically, accelerated differentiation of human mesenchymal stem cells to an osteoblast phenotype (1-10 nM). Compound I (≥0.1 nM) also activated osteoblasts and induced bone formation in isolated neonatal mouse calvariae. Compound I required higher concentrations (100 nM) to inhibit differentiation and activity of osteoclasts. Transcriptional profiling (TxP) of calvaria treated with 1 μM compound I revealed down-regulation of osteoclastic genes and up-regulation of matrix genes and genes associated with the osteoblast phenotype, confirming compound I's dual effects on bone resorption and formation. In addition, calvarial TxP implicated calcitonin-related polypeptide, β (β-CGRP) as a potential mediator of compound I's osteogenic effect. In vivo, compound I (1 mg/kg s.c.) increased vertebral trabecular bone volume 21% (microcomputed tomography) in intact female mice. Increased trabecular volume was also detected histologically in a separate bone, the femur, particularly in the secondary spongiosa (100% increase), which underwent a 171% increase in bone formation rate, a 73% increase in mineralizing surface, and a 59% increase in mineral apposition rate. Similar effects were observed in ovariectomized mice with established osteopenia. We conclude that the Src inhibitor compound I is osteogenic, presumably because of its potent stimulation of osteoblast differentiation and activation, possibly mediated by β-CGRP.