Bone marrow stem cells reside in close proximity to endosteal osteoblasts. To explore the potential role of osteoblasts in hematopoietic differentiation, we measured the mRNA accumulation, protein production, and secretion of hematopoietic growth factors by the nonmineralizing MG-63 and the mineralizing SaOS-2 human osteosarcoma cell lines. mRNA for the osteoblast-specific protein osteocalcin was well as granulocyte colony-stimulating factor (G-CSF), transforming growth factor-β1 (TGF-β1), and tumor necrosis factor-α (TNF-α) was produced by the MG-63 and SaOS-2 cells, like primary human cells, in the presence and absence of L-ascorbate and P-glycerol phosphate. In contrast, both cell lines expressed c-kit ligand mRNA only in the absence of L-ascorbate and p-glycerol phosphate induction. Granulocyte-macrophage (GM)-CSF and interleukin-6 (IL-6) mRNA appeared to develop with increasing culture age. G-CSF protein was identified in several cell-associated forms including the 28- and 32-kD species. In addition, GM-CSF was found in a cell-associated form. These results suggest that osteoblasts might play a central role in the hematopoietic microenvironment as basal producers of G-CSF and GM-CSF and suggest the possibility that osteoblasts may locally present these proteins in an membrane-associated fashion.