In diabetic patients, advanced glycation end products (AGEs) cause bone fragility because of deterioration of bone quality. We previously showed that AGEs suppressed the mineralization of mouse stromal ST2 cells. TGF-β is abundant in bone, and enhancement of its signal causes bone quality deterioration. However, whether TGF-β signaling is involved in the AGE-induced suppression of mineralization during the osteoblast lineage remains unknown. We therefore examined the roles of TGF-β in the AGE-induced suppression of mineralization of ST2 cells and human mesenchymal stem cells. AGE3 significantly (P < .001) inhibited mineralization in both cell types, whereas transfection with small interfering RNA for the receptor for AGEs (RAGEs) significantly (P < .05) recovered this process in ST2 cells. AGE3 increased (P < .001) the expression of TGF-β mRNA and protein, which was partially antagonized by transfection with RAGE small interfering RNA. Treatment with a TGF-β type I receptor kinase inhibitor, SD208, recovered AGE3-induced decreases in osterix (P < .001) and osteocalcin (P < .05) and antagonized the AGE3-induced increase in Runx2 mRNA expression in ST2 cells (P < .001). Moreover, SD208 completely and dose dependently rescued AGE3-induced suppression of mineralization in both cell types. In contrast, SD208 intensified AGE3-induced suppression of cell proliferation as well as AGE3-induced apoptosis in proliferating ST2 cells. These findings indicate that, after cells become confluent, AGE3 partially inhibits the differentiation and mineralization of osteoblastic cells by binding to RAGE and increasing TGF-β expression and secretion. They also suggest that TGF-β adversely affects bone quality not only in primary osteoporosis but also in diabetes-related bone disorder.