Introduction: Activator protein (AP)-1 family members play important roles in the development and maintenance of the adult skeleton. Transgenic mice that overexpress the naturally occurring ΔFosB splice variant of FosB develop severe osteosclerosis. Translation of Δfosb mRNA produces both ΔFosB and a further truncated isoform (Δ2ΔFosB) that lacks known transactivation domains but, like ΔFosB, induces increased expression of osteoblast marker genes. Materials and Methods: To test Δ2ΔFosB's ability to induce bone formation in vivo, we generated transgenic mice that overexpress only Δ2ΔFosB using the enolase 2 (ENO2) promoter-driven bitransgenic Tet-Off system. Results: Despite Δ2ΔFosB's failure to induce transcription of an AP-1 reporter gene, the transgenic mice exhibited both the bone and the fat phenotypes seen in the ENO2-ΔFosB mice. Both ΔFosB and Δ2ΔFosB activated the BMP-responsive Xvent-luc reporter gene and increased Smad1 expression. Δ2ΔFosB enhanced BMP-induced Smad1 phosphorylation and the translocation of phospho-Smad1 (pSmad1) to the nucleus more efficiently than ΔFosB and showed a reduced induction of inhibitory Smad6 expression. Conclusions: ΔFosB's AP-1 transactivating function is not needed to induce increased bone formation, and Δ2ΔFosB may act, at least in part, by increasing Smad1 expression, phosphorylation, and translocation to the nucleus. © 2008 American Society for Bone and Mineral Research.