In this study, we determined the molecular mechanisms whereby forkhead transcription factor Foxo1, a key downstream signaling molecule of insulin-like growth factor 1 (IGF1)/insulin actions, regulates Runx2 activity and expression of the mouse osteocalcin gene 2 (Bglap2) in osteoblasts in vitro. We showed that Foxo1 inhibited Runx2-dependent transcriptional activity and osteocalcin mRNA expression and Bglap2 promoter activity in MC-4 preosteoblasts. Co-immunoprecipitation assay showed that Foxo1 physically interacted with Runx2 via its C-terminal region in osteoblasts or when co-expressed in COS-7 cells. Electrophoretic mobility shift assay demonstrated that Foxo1 suppressed Runx2 binding to its cognate site within the Bglap2 promoter. IGF1 and insulin prevented Foxo1 from inhibiting Runx2 activity by promoting Foxo1 phosphorylation and nuclear exclusion. In contrast, a neutralizing anti-IGF1 antibody decreased Runx2 activity and osteocalcin expression in osteoblasts. Chromatin immunoprecipitation assay revealed that IGF1 increased Runx2 interaction with a chromatin fragment of the proximal Bglap2 promoter in a PI3K/AKT-dependent manner. Conversely, knockdown of Foxo1 increased Runx2 interaction with the promoter. This study establishes that Foxo1 is a novel negative regulator of osteoblast-specific transcription factor Runx2 and modulates IGF1/insulin-dependent regulation of osteocalcin expression in osteoblasts.