Bone loss and osteoporosis are major public health problems in the elderly. With increasing life expectancy in the United States, the number of people that will develop age-related bone loss and osteoporosis is expected to rise to over 61 million by 2020. Osteoblast differentiation is a crucial aspect of bone formation and remodeling, a process severely compromised in osteoporosis. Almost all the FDA-approved treatments for building healthier bones, excluding parathyroid hormone (PTH), do not address the decrease in osteoblast differentiation seen in osteoporosis and rather are designed to target osteoclasts and bone resorption. The purpose of this study is to examine the effects of NFAT inhibition on osteoblast differentiation and to elucidate the mechanism of its action. Here we demonstrate that the inhibition of calcineurin (Cn) by using cyclosporine A (CsA) increases osteoblast differentiation, both in vivo and in vitro. Furthermore, the specific inhibition of NFATc1 by siRNA increased Fra-2 expression in osteoblasts. Taken together, our results point the way to a novel mechanism to aid in the development of anabolic treatment for osteoporosis. © 2006 New York Academy of Sciences.