Periostin-like-factor (PLF), an isoform related to Periostin, is expressed in bone, heart, and vascular smooth muscle cells. PLF was detected by immunostaining in mesenchymal cells in the periosteum and in osteoblasts lining trabecular bone, suggesting that PLF has a role in osteogenesis. PLF has a signal peptide and is also secreted from osteoblasts in vitro. To study the function of PLF in osteogenesis, we assessed the effect of PLF on osteoblast proliferation and differentiation in vitro and bone formation in vivo. First, to examine whether PLF regulates osteoblast proliferation in vitro, the CyQUANT cell proliferation assay was performed. PLF over-expression by adenovirus resulted in a significantly higher rate of cell proliferation compared to controls. This finding suggests that PLF promotes osteoblast proliferation in vitro. Second, to test whether PLF mediates osteoblast differentiation in vitro, differentiation markers of osteoblasts, were assessed, including alkaline phosphatase staining and activity, von Kossa staining and calcium deposition. Over-expression of PLF resulted in higher expression and activity of alkaline phosphatase and higher amounts of mineralization and calcium deposition compared to controls. These data suggest that PLF promotes osteoblast differentiation in vitro. Third, to investigate the role of PLF in bone formation in vivo, PLF adenovirus was injected into 6-week-old rat femur bone marrow. Over-expression of PLF resulted in increased bone formation within the marrow cavity. Lastly, in a model of fracture healing, PLF expression is robustly upregulated in callus osteoblasts at post-fracture days 7 and 14. Taken together, these findings suggests that PLF induces bone formation in vivo. We conclude that PLF stimulates bone formation in vivo possibly by promoting osteoblast proliferation and differentiation.