The Runx2/Cbfa1 transcription factor is a scaffolding protein that promotes osteoblast differentiation; however, the specific Runx2-functional domains required for induction of the osteogenic lineage remain to be identified. We approached this question using a TERT-immortalized cell line derived from calvaria of Runx2-null mice by reconstituting the osteogenic activity with wild-type and deletion mutants of Runx2. The presence or absence of osteogenic media (beta-glycerol phosphate and ascorbic acid) and/or with BMP2 did not stimulate osteoblastic gene expression in the Runx2-null cells. However, cells infected with wild-type Runx2 adenovirus showed a robust temporal increase in the expression of osteoblast marker genes and were competent to respond to BMP2. Early markers (i.e., collagen type-1, alkaline phosphatase) were induced (four- to eightfold) at Days 4 and 8 of culture. Genes representing mature osteoblasts (e.g., Runx2, osteopontin, bone sialoprotein, osteocalcin) were temporally expressed and induced from 18- to 36-fold at Days 8 and 12. Interestingly, TGFbeta and Vitamin D-mediated transcription of osteoblast genes (except for osteopontin) required the presence of Runx2. Runx2 lacking the C-terminal 96 amino acids (Runx2 Delta432) showed a pattern of gene expression similar to wild-type protein, demonstrating the Groucho interaction and part of the activation domain are dispensable for Runx2 osteogenic activity. Upon further deletion of the Runx2 C-terminus containing the nuclear matrix targeting signal and Smad-interacting domain (Delta391), we find none of the osteoblast markers are expressed. Therefore, the Runx2 391-432 domain is essential for execution of the BMP2 osteogenic signal.