Recent studies have shown that Basic Fibroblast Growth Factor increases bone resorption and increases interstitial collagenase mRNA and protein in osteoblasts. We examined the effect of bFGF on a 1.8-kb fragment of the rabbit collagenase promoter linked to a chloramphenicol acetyl transferase CAT construct stably transfected into mouse osteoblastic MC3T3-E1 cells. Treatment with bFGF (10(-8)M) for 24 h caused a 3-fold increase in collagenase-CAT activity. CAT activity in a construct without the collagenase promoter was not regulated by 48 h treatment with bFGF (10(-8)M). Neither indomethacin nor staurosporine blocked the effect of bFGF on collagenase-CAT activity in these cells. However, the stimulatory effect of bFGF on collagenase-CAT activity was inhibited by genistein and herbimycin A, which are tyrosine kinase inhibitors. These data show for the first time that bFGF transcriptionally regulates collagenase gene expression in osteoblasts through a protein tyrosine kinase-dependent pathway.