We have used c-Fos transgenic mice which develop osteosarcomas to determine the expression patterns of cyclins, cyclin-dependent kinases (CDKs), and cyclin-dependent kinase inhibitors (CKIs) in different bone cell populations in order to define the potential mechanisms of c-Fos transformation. Immunohistochemical analysis in embryonic and early postnatal bone demonstrated that cyclin E and its kinase partner CDK2 were expressed specifically in bone-forming osteoblasts. Cyclin D1 expression was absent despite high levels of CDK4 and CDK6, and the CKI p27 was expressed in chondrocytes, osteoclasts, and at lower levels in osteoblasts. Following activation of the c-fos transgene in vivo and before overt tumor formation, cyclin D1 expression increased dramatically and was colocalized with exogenous c-Fos protein specifically in osteoblasts and chondrocytes, but not in osteoclasts. Prolonged activation of c-Fos resulted in osteosarcoma formation wherein the levels of cyclin D1, cyclin E, and CDKs 2, 4, and 6 were high in a wide spectrum of malignant cell types, especially in transformed osteoblasts. The CKI p27 was expressed at very high levels in bone-resorbing osteoclasts, and to a lesser extent in chondrocytes and osteoblasts. These in vivo observations suggest that cyclin D1 may be a target for c-Fos action and that elevation of cyclin D1 in osteoblasts which already express cyclin E/CDK2 and the cyclin D1 partners CDKs-4 and 6, may predispose cells to uncontrolled cell growth leading to osteosarcoma development. This study implicates altered cell cycle control as a potential mechanism through which c-Fos causes osteoblast transformation and bone tumor formation.