Transcription factors regulate tissue specific differentiation of pluripotent mesenchyme to osteoblast (OB), myoblast (MB) and other lineages. Osterix (Osx) is an essential transcription factor for bone development as knock-out results in lack of a mineralized skeleton. The proximal Osx promoter contains numerous binding sequences for MyoD and 14 repeats of a binding sequence for Myf5. These basic helix loop helix (bHLH) transcription factors have a critical role in MB differentiation and muscle development. We tested the hypothesis that bHLH transcription factors also support OB differentiation through regulation of Osx. Transfection of a MyoD expression vector into 2 primitive mesenchymal cell lines, C3H/10T1/2 and C2C12, stimulated a 1.2 kb Osx promoter-luciferase reporter 70 fold. Myf5 stimulated the Osx promoter 6 fold. Deletion analysis of the promoter revealed that 1 of 3 proximal bHLH sites is essential for MyoD activity. The Myf5 repeat conferred 60% of Myf5 activity with additional upstream sequence required for full activity. MyoD bound the active bHLH sequence and its 3' flanking region, as shown by EMSA and ChIP assays. Real time PCR revealed that primitive C2C12 and C3H/10T1/2 cells, pre-osteoblastic MC3T3 cells, and undifferentiated primary marrow stromal cells express the muscle transcription factors. C2C12 cells, which differentiate to MB spontaneously and form myotubules, were treated with bone morphogenetic protein 2 (BMP-2) to induce OB differentiation. BMP-2 stimulated expression of Osx and the differentiation marker alkaline phosphatase, and blocked myotubule development. BMP-2 suppressed the muscle transcription factor myogenin, but expression of MyoD and Myf5 persisted. Silencing of MyoD inhibited BMP-2 stimulation of Osx and blocked the later appearance of bone alkaline phosphatase. MyoD support of Osx transcription contributes to early OB differentiation.