The effects of cAMP and cGMP on the differentiation of osteoblast-like cells derived from rat calvariae and on the formation of bone in vitro were studied. Continuous culture of osteoblast-like cells in the presence of 8-bromo-cyclic AMP (8-Br-cAMP) resulted in the dose-related inhibition both of the synthesis of cellular alkaline phosphatase (ALPase), which is known as a marker of osteoblastic differentiation, and of the formation of mineralized nodules, which is a model of the formation of bone in vitro. By contrast, 8-bromo-cyclic GMP (8-Br-cGMP) promoted the synthesis of ALPase and the formation of mineralized nodules. Northern blot analysis revealed that these cyclic nucleotides modulated the steady-state levels of mRNAs for ALPase and osteocalcin, a bone-matrix protein that is specifically produced by osteoblast. The present results indicate that cAMP and cGMP act reciprocally to regulate osteoblastic differentiation and the subsequent formation of mineralized nodules.