We established bone marrow stromal cell lines from a transgenic mouse that harbors a temperature-sensitive mutant of the simian virus 40-derived large T-antigen under the control of a major histocompatibility complex (MHC) I promotor. These cell lines were screened for their ability to induce the formation of osteoclasts in a spleen cell/stromal cell coculture system. By means of this screen, five clones, referred to as marine bone marrow stromal clone 1 (mBMS-B1) mBMS-B2, mBMS-B14, mBMS-B18, and mBMS-B21, were selected for detailed characterization. Cell growth depends on culture conditions, i.e., cells grow at 33 degrees C in the presence of murine interferon-gamma, whereas cell proliferation ceases at 39 degrees C. The phenotype of the cells is also correlated with the culture conditions because the osteoclast inductive capacity is only seen at 39 degrees C, indicating that the cells undergo differentiation when the transforming agent is inactivated. These conditionally immortalized stromal cells can be induced to express a variety of markers that are typical for mature osteoblasts, e.g., alkaline phosphatase activity and expression of functional parathyroid hormone receptor after stimulation with soluble osteogenic protein 1 (sOP-1). mRNA analysis revealed the expression and regulation of osteopontin, osteonectin, and collagen alpha 1(I) as well as the inducibility of osteocalcin upon treatment with sOP-1. The cells have the potential to form mineralized nodules in supplemented medium. We observed expression of vascular cell adhesion molecule-1, which is stimulated upon treatment of the cells with 1 alpha,25-dihydrocholecalciferol after 4 days, indicating the presence of the receptor for this steroid. These cell lines represent a model to study mechanisms and factors involved in osteoblast differentiation.