We examine clonal murine calvarial MC3T3-E1 cells to determine if they exhibit a developmental sequence similar to osteoblasts in bone tissue, namely, proliferation of undifferentiated osteoblast precursors followed by postmitotic expression of differentiated osteoblast phenotype. During the initial phase of developmental (days 1–9 of culture), MC3T3-E1 cells actively replicate, as evidenced by the high rates of DNA synthesis and progressive increase in cell number, but maintain a fusiform appearance, fail to express alkaline phosphatase, and do not accumulate mineralized extracellular collagenous matrix, consistent with immature osteoblasts. By day 9 the cultures display cuboidal morphology, attain confluence, and undergo growth arrest. Downregulation of replication is associated with expression of osteoblast functions, including production of alkaline phosphatase, processing of procollagens to collagens, and incremental deposition of a collagenous extracellular matrix. Mineralization of extracellular matrix, which begins approximately 16 days after culture, marks the final phase of osteoblast phenotypic development. Expression of alkaline phosphatase and mineralization is time but not density dependent. Type I collagen synthesis and collagen accumulation are uncoupled in the developing osteoblast. Although collagen synthesis and message expression peaks at day 3 in immature cells, extracellular matrix accumulation is minimal. Instead, matrix accumulates maximally after 7 days of culture as collagen biosynthesis is diminishing. Thus, extracellular matrix formation is a function of mature osteoblasts. Ascorbate and β-glycerol phosphate are both essential for the expression of osteoblast phenotype as assessed by alkaline phosphatase and mineralization of extracellular matrix. Ascorbate does not stimulate type I collagen gene expression in MC3T3-E1 cells, but it is absolutely required for deposition of collagen in the extracellular matrix. Ascorbate also induces alkaline phosphatase activity in mature cells but not in immature cells. β-glycerol phosphate displays synergistic actions with ascorbate to further stimulate collagen accumulation and alkaline phosphatase activity in postmitotic, differentiated osteoblast-like cells. Mineralization of mature cultures requires the presence of β-glycerol phosphate. Thus, MC3T3-E1 cells display a time-dependent and sequential expression of osteoblast characteristics analogous to in vivo bone formation. The developmental sequence associated with MC3T3-E1 differentiation should provide a useful model to study the signals that mediate the switch between proliferation and differentiation in bone cells, as well as provide a renewable culture system to examine the molecular mechanism of osteoblast maturation and the formation of bone-like extracellular matrix.