Bone morphogenetic proteins (BMPs) regulate many aspects of skeletal development, including osteoblast and chondrocyte differentiation, cartilage and bone formation, and cranial and limb development. Among them, BMP-2, one of the most potent osteogenic signaling molecules, stimulates osteoblast differentiation, while it inhibits myogenic differentiation in C2C12 cells. To evaluate genes involved in BMP-2-induced osteoblast differentiation, we performed cDNA microarray analyses to compare BMP-2-treated and -untreated C2C12 cells. We focused on Alx3 (aristaless-like homeobox 3) which was clearly induced during osteoblast differentiation. Alx3, a homeobox gene related to the Drosophilaaristaless gene, has been linked to developmental functions in craniofacial structures and limb development. However, little is known about its direct relationship with bone formation. In the present study, we focused on the mechanisms of Alx3 gene expression and function during osteoblast differentiation induced by BMP-2. In C2C12 cells, BMP-2 induced increase of Alx3 gene expression in both time- and dose-dependent manners through the BMP receptors-mediated SMAD signaling pathway. In addition, silencing of Alx3 by siRNA inhibited osteoblast differentiation induced by BMP-2, as showed by the expressions of alkaline phosphatase (Alp), Osteocalcin, and Osterix, while over-expression of Alx3 enhanced osteoblast differentiation induced by BMP-2. These results indicate that Alx3 expression is enhanced by BMP-2 via the BMP receptors mediated-Smad signaling and that Alx3 is a positive regulator of osteoblast differentiation induced by BMP-2.