The influence of 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD), a potent halogenated aromatic hydrocarbon, on the development of bone tissue-like organization in primary cultures of normal diploid calvarial-derived rat osteoblasts was examined. Initially, when placed in culture, these cells actively proliferate while expressing genes associated with biosynthesis of the bone extracellular matrix. Then, post-proliferatively, genes are expressed that render the osteoblast competent for extracellular matrix mineralization and maintenance of structural as well as functional properties of the mature bone-cell phenotype. Our results indicate that, in the presence of TCDD, proliferation of osteoblasts was not inhibited but post-confluent formation of multicellular nodules that develop bone tissue-like organization was dramatically suppressed. Consistent with TCDD-mediated abrogation of bone nodule formation, expression of alkaline phosphatase and osteocalcin was not upregulated post-proliferatively. These findings are discussed within the context of TCDD effects on estrogens and vitamin D-responsive developmental gene expression during osteoblast differentiation and, from a broader biological perspective, on steroid hormone control of differentiation.