N16 is a protein from the nacreous layer of Pinctada fucata, a pearl oyster. It has been found to promote biomineralization, and we hypothesized that it also plays a role in bone metabolism. The cDNA of N16 was cloned and expressed in Escherichia coli to produce N16 protein, which was purified to high homogeneity by ion-exchange and gel filtration columns. The effects of N16 on osteoclast differentiation and osteogenesis were clarified using the murine preosteoclast cell line RAW 264.7 and the preosteoblast cell line MC3T3-E1. Results on preosteoclasts showed that N16 only slightly inhibited cell survival but significantly inhibited differentiation induced by receptor activator of nuclear factor kappa-B ligand (RANKL). Apart from reduced formation of multinucleated osteoclasts, N16-treated cells exhibited lower gene expression and enzymatic activity typical of mature osteoclasts. Actin ring formation and intracellular acidification essential for osteoclastic function were also impaired upon N16 treatment. At concentrations nontoxic to preosteoblasts, N16 strongly up-regulated alkaline phosphatase activity and increased mineralized nodule formation, which are indicative of differentiation into osteoblasts. These effects coincided with an increase in mRNA expression of osteoblast markers osteopotin and osteocalcin. The present study demonstrated that N16 has both anabolic and antiresorptive effects on bone, which makes it potentially useful for treating osteoporosis.