Expression of cell cycle (core and H1 histone) and cell growth (c-myc and c-fos) regulated genes was examined in primary cultures of chick calvarial osteoblasts during a developmental sequence associated with the progressive maturation of the osteoblast in a bonelike mineralized extracellular matrix. We have identified a transition point early in the developmental sequence which occurs when proliferation ceases and expression of genes related to the differentiated phenotype of osteoblasts is initiated. During this transition period, cellular levels of RNA transcripts from core and H1 histone genes and the c-myc and c-fos protooncogenes decrease in a parallel and coordinate manner. The decline in histone gene transcription that accompanies the loss of accumulated histone mRNA indicates that the downregulation of histone gene expression is at least, in part, transcriptionally mediated. In contrast, persistence of c-myc and c-fos transcription following completion of the proliferation period, when the mRNAs are no longer present at detectable levels, suggests that the initial downregulation of protooncogene expression is controlled at the level of messenger RNA stability. Thus, two types of signaling mechanisms are operative in the down-regulation of cell proliferation genes during osteoblast differentiation--one that impinges on regulatory sequences that influence the interactions of transcription factors with cis-acting promoter elements and a second that modulates messenger RNA turnover. Of significance, downregulation of the cell cycle regulated histone genes is accompanied by a reciprocal increase in the expression of a structurally distinct subset of the histone genes that are not coupled with DNA replication during the period of expression of osteoblast phenotype markers.(ABSTRACT TRUNCATED AT 250 WORDS)