Glucocorticoids play a pivotal role in the proliferation of osteoblasts, but the underlying mechanism has not been successfully elucidated. In this report, we have investigated the molecular mechanism which elucidates the inhibitory effects of dexamethasone on murine osteoblastic MC3T3-E1 cells. It was found that the inhibitory effects were largely attributed to apoptosis and G1 phase arrest. Both the cell cycle arrest and apoptosis were dependent on glucocorticoid receptor (GR), as they were abolished by GR blocker RU486 pre-treatment and GR interference. G1 phase arrest and apoptosis were accompanied with a p53-dependent up-regulation of p21 and pro-apoptotic genes NOXA and PUMA. We also proved that dexamethasone can't induce apoptosis and cell cycle arrest when p53 was inhibited by p53 RNA interference. These data demonstrate that proliferation of MC3T3-E1 cell was significantly and directly inhibited by dexamethasone treatment via aberrant GR activation and subsequently P53 activation.