Highly coordinated regulation of cell proliferation and differentiation contributes to the formation of functionally shaped and sized teeth; however, the mechanism underlying the switch from cell cycle exit to cell differentiation during odontogenesis is poorly understood. Recently, we identified pannexin 3 (Panx3) as a member of the pannexin gap junction protein family from tooth germs. The expression of Panx3 was predominately localized in preodontoblasts that arise from dental papilla cells and can differentiate into dentin-secreting odontoblasts. Panx3 also co-localized with p21, a cyclin-dependent kinase inhibitor protein, in preodontoblasts. Panx3 was expressed in primary dental mesenchymal cells and in the mDP dental mesenchymal cell line. Both Panx3 and p21 were induced during the differentiation of mDP cells. Overexpression of Panx3 in mDP cells reduced cell proliferation via up-regulation of p21, but not of p27, and promoted the Bone morphogenetic protein 2 (BMP2)-induced phosphorylation of Smad1/5/8 and the expression of dentin sialophosphoprotein (Dspp), a marker of differentiated odontoblasts. Furthermore, Panx3 released intracellular ATP into the extracellular space through its hemichannel and induced the phosphorylation of AMP-activated protein kinase (AMPK). 5-Aminoimidazole-4-carboxamide-ribonucleoside (AICAR), an activator of AMPK, reduced mDP cell proliferation and induced p21 expression. Conversely, knockdown of endogenous Panx3 by siRNA inhibited AMPK phosphorylation, p21 expression, and the phosphorylation of Smad1/5/8 even in the presence of BMP2. Taken together, our results suggest that Panx3 modulates intracellular ATP levels, resulting in the inhibition of odontoblast proliferation through the AMPK/p21 signaling pathway and promotion of cell differentiation by the BMP/Smad signaling pathway.