Osteoblasts, derived from pluripotent mesenchymal precursor cells, acquire their differentiated phenotypes under the control of a series of regulatory factors, the best known of which is BMP-2. Our recent preliminary studies suggest that expression of deltaEF1, a member of the zinc finger-homeodomain transcription factor family, is significantly down-regulated as human mesenchymal stem cells (MSCs) are subjected to osteoblastic differentiation in the presence of BMP-2. Here we demonstrate that overexpression of deltaEF1 in murine pre-myoblast C2C12 cells resulted in a decrease in the mRNA levels of early osteoblast marker genes induced by BMP-2 including osterix and collagen type I. This inhibitory effect was further confirmed by decreased alkaline phosphatase (ALP) activities. Neither of the zinc finger clusters of deltaEF1 is necessary for its repressive effect on BMP-2-induced osteoblastic differentiation of C2C12 cells. Immunoprecipitation results indicated that deltaEF1 did not physically associate with Smads proteins, suggesting that the inhibitory effect of deltaEF1 may be Smad-independent. deltaEF1 overexpression in C2C12 cells resulted in down-regulation of activating protein-1 (AP-1) activities promoted by BMP-2. Moreover, deltaEF1 exhibited transrepression on murine osteocalcin gene which effect is partially mediated through diminishing of AP-1 signaling. These results suggest that deltaEF1 acts as a potent inhibitor of BMP-2-induced osteogenesis in vitro, in part, by differentially regulating the AP-1 signaling pathway.