Retinoic acid has been shown to adversely affect craniofacial development. Cleft palate and craniosynostosis are two examples of craniofacial defects associated with prenatal exposure to this agent. Although the effects of retinoic acid on cephalic neural crest-derived tissues have previously been studied, the specific effects of retinoic acid on the cellular biology of osteoblasts remain unclear. The purpose of this study was to analyze in detail the effects of pharmacologic doses of retinoic acid on the differentiation and proliferation of osteoblasts derived from an intramembranous source. Primary rat calvarial osteoblasts were established in culture and treated with 1 or 10 μM all-trans-retinoic acid. Retinoic acid treatment markedly increased expression of osteopontin up to 48 h after stimulation. Consistent with this early stage of differentiation, both mRNA and protein analysis of FGF receptor isoforms demonstrated a switch in predominance from fibroblast growth factor receptor 2 (fgfr2) to fgfr1. Analysis of PCNA protein confirmed inhibition of proliferation by retinoic acid. To determine whether these alterations in osteoblast biology would lead to increased differentiation, we examined short term [alkaline phosphatase (AP) activity] and long term (von Kossa staining) surrogates of bone formation in vitro. These assays confirmed that retinoic acid increased osteogenesis, with a 4-fold increase in bone nodule formation in cells treated with 10 μM retinoic acid after 28 days. Overall, our results demonstrated that pharmacologic doses of all-trans-retinoic acid decreased osteoblast proliferation and increased differentiation, suggesting that retinoic acid may effect craniofacial development by pathologically enhancing osteogenesis. © 2005 Wiley-Liss, Inc.