An in vitro model was set up to investigate the effects of low frequency pulsed electromagnetic fields (PEMF) and its induced electric fields on osteoblast cells under inflammatory conditions. Osteoblasts (7F2) were seeded on top of chitosan scaffolds and co-cultured with macrophage cells (RAW 264.7) growing on the bottom of culture wells, stimulated by lipopolysaccharide to release reactive oxygen species including nitric oxide (NO). The co-culture was exposed to PEMF (magnitude of the magnetic field = 1.5 mT; induced electric voltage = 2.5 mV; frequency = 75 Hz; pulse duration = 1.3 ms) for 9 h. The osteoblasts were examined for their proliferation, viability, alkaline phosphatase (ALP) activity, and genetic expressions of type I collagen (COL I) and osteocalcin (OC), immediately and 7 days after PEMF exposure (days 0 and 7). Macrophage cell viability and NO concentration in the medium were monitored before and after PEMF exposure. The PEMF-exposed co-culture released a significantly higher amount of NO (65 µM) compared to control (17 µM) on day 7. Despite the high level of NO in the medium that was reported to be cytotoxic, PEMF-exposed osteoblasts had enhanced cell proliferation (23%), viability (36%), and COL I mRNA expression (3.4-fold) compared to the controls. The osteoblasts subjected to the PEMF had 41% less ALP activity than the control, which was associated with the active cell proliferation and COL I expression. The expression of OC mRNA was not seen in either the PEMF or control group, indicating cells had not entered the mineralization stage by day 7. Bioelectromagnetics 32:552–560, 2011. © 2011 Wiley-Liss, Inc.