Osteoblasts and adipocytes may develop from common bone marrow mesenchymal precursors. Transgenic mice overexpressing DeltaFosB, an AP-1 transcription factor, under the control of the neuron-specific enolase (NSE) promoter show both markedly increased bone formation and decreased adipogenesis. To determine whether the two phenotypes were linked, we targeted overexpression of DeltaFosB in mice to the osteoblast by using the osteocalcin (OG2) promoter. OG2-DeltaFosB mice demonstrated increased osteoblast numbers and an osteosclerotic phenotype but normal adipocyte differentiation. This result firmly establishes that the skeletal phenotype is cell autonomous to the osteoblast lineage and independent of adipocyte formation. It also strongly suggests that the decreased fat phenotype of NSE-DeltaFosB mice is independent of the changes in the osteoblast lineage. In vitro, overexpression of DeltaFosB in the preadipocytic 3T3-L1 cell line had little effect on adipocyte differentiation, whereas it prevented the induction of adipogenic transcription factors in the multipotential stromal cell line ST2. Also, DeltaFosB isoforms bound to and altered the DNA-binding capacity of C/EBPbeta. Thus, the inhibitory effect of DeltaFosB on adipocyte differentiation appears to occur at early stages of stem cell commitment, affecting C/EBPbeta functions. It is concluded that the changes in osteoblast and adipocyte differentiation in DeltaFosB transgenic mice result from independent cell-autonomous mechanisms.