The long-term objective of this proposal is to determine the role of TGF-b in bone formation through the regulation of mesenchymal stem/progenitor cells (MSCs) proliferation and osteoblastic differentiation. Accumulating evidence strongly supports the notion that TGF-b plays a very important role in bone formation, resorption, and repair. In both in vivo and in vitro model systems, TGF-b exhibits potent effects on multiple functions of bone cells. The signaling mechanisms underlying the complex activities of TGF-b on bone remodeling, however, remain largely unknown. Recently, we found that Smad3-deficient animals develop an osteopenic phenotype, thus providing direct evidence supporting the hypothesis that Smad3 acts as an important mediator for TGF-b in bone formation and metabolism. More importantly, we have made a highly significant finding that TGF-b induces b-catenin nuclear translocation in MSCs, suggesting that cross-talk between the TGF-b and Wnt signaling pathways plays a critical role in regulating the proliferation and differentiation of bone marrow-derived MSCs which can differentiate into osteoblasts. To investigate the mechanism by which TGF-b regulates proliferation and osteoblastic differentiation of MSCs, we will focus on two Specific Aims. For Aim 1, we will test the hypothesis that modulation of the localization and activity of b-catenin by TGF-b in the specific cellular context of MSCs represents the underlying mechanism by which TGF-b promotes the proliferation of those cells. We will determine if the pro-proliferation activity of TGF-b depends on the nuclear translocation of b-catenin and whether the presence of autocrine Wnt signaling and/or the absence of cadherin expression constitute the unique cellular context of MSCs. For Aim 2, we will focus on elucidation of the molecular mechanism underlying the activation of the TGF-b receptors and the mobilization of b-catenin into the nucleus. Specifically, we will determine if the induction of b-catenin nuclear translocation is a Smad-dependent process and examine the structural requirement for the interaction between Smads and b-catenin. Bone formation and repair is a complex process modulated by multiple factors, including TGF-b and its family members. Thus, the accomplishment of these proposed studies will provide further understanding of the molecular mechanism by which TGF-b regulates bone remodeling and contribute to the development of novel therapeutics for the treatment of human bone diseases. [unreadable] [unreadable]