Fibroblast growth factor-2 (FGF2) is a powerful promoter of bone growth. We demonstrate here that brief exposure to FGF2 enhances mineralized nodule formation in cultured rat osteoprogenitor cells due to an expansion of cells that subsequently mineralize. This mitogenic effect is mediated via sulfated glycosaminoglycans (GAGs), FGFR1, and the extracellular signal-regulated kinase (ERK) pathway. The GAGs involved in this stimulation are chondroitin sulfates (CS) rather than heparan sulfates (HS). However, continuous FGF2 treatment reduces alkaline phosphatase (ALP) activity, downregulates collagen Ialpha1 (ColIalpha1) and FGFR3 expression, upregulates the expression and secretion of osteopontin (OPN) and inhibits mineralization. The inhibitory effects of FGF2 on FGFR3 expression and ALP activity are also mediated by the ERK pathway, although the effects of FGF2 on ColIalpha1 and OPN expression are mediated by GAGs and PKC activity. Thus short-term activation of FGF2/FGFR1 promotes osteoprogenitor proliferation and subsequent differentiation, while long-term activation of FGF2 signaling disrupts mineralization by modulating osteogenic marker expression. This study thus establishes the central role of sulfated GAGs in the osteogenic progression of osteoprogenitors.