Developmental studies of oncogene expression implicate the Fos and Jun family of transcription factors in the regulation of bone growth and differentiation. Promoters of many developmentally regulated genes, including osteocalcin, a marker of osteoblast differentiation, contain AP-1 sites that bind Fos/Jun dimers. Here, we demonstrate that the selective expression of fos- and jun-related genes is functionally related to the stage of osteoblast growth and differentiation in vitro. During osteoblast proliferation, nuclear protein levels of all seven activating protein-1 (AP-1) members are maximal. Subsequently, during the period of extracellular matrix maturation, levels decline. In fully differentiated osteoblasts, Fra-2 and (to a lesser extent) Jun D are the principal AP-1 members detectable by Western blot analysis. AP-1 complex composition and binding activity also exhibit developmental changes. All Fos and Jun family members are involved in AP-1 complex formation in proliferating cells, whereas Fra-2 and Jun D predominate in AP-1 complexes in differentiated osteoblasts. Overexpression of Fos and Jun family members in ROS 17/2.8 cells markedly affects the expression of an osteocalcin promoter-chloramphenicol acetyltransferase construct. Coexpression of only one AP-1 pair, Fra-2 and Jun D, stimulated reporter expression, whereas coexpression of other AP-1 pairs down-regulated expression (i.e. c-jun and any Fos family member) or had no effect (i.e. Fra-1 and Jun B). Promoter deletion analyses indicate that these effects are site specific. Consequential effects of Fra-2 on osteoblast differentiation are further demonstrated by antisense studies in which osteoblast differentiation and the development of a bone tissue-like organization were suppressed. Consistent with recent findings suggesting that AP-1 complex composition can selectively regulate gene transcription, our findings demonstrate that differential expression of Fos and Jun family members could play a role in the developmental regulation of bone-specific gene expression and, as a result, may be functionally significant for osteoblast differentiation.