Lipopolysaccharide from Porphyromonas gingivalis (P-LPS), an important pathogenic bacterium, is closely associated with inflammatory destruction of periodontal tissues. P-LPS induces the release of cytokines and local factors from inflammatory cells, stimulates osteoclastic-cell differentiation, and causes alveolar bone resorption. However, the effect of P-LPS on osteoblastic-cell differentiation remains unclear. In this study, we investigated the effect of P-LPS extract prepared by the hot-phenol-water method, on the differentiation of primary fetal rat calvaria (RC) cells, which contain a subpopulation of osteoprogenitor cells, into osteoblastic cells. P-LPS extract significantly inhibited bone nodule (BN) formation and the activity of alkaline phosphatase (ALPase), an osteoblastic marker, in a dose-dependent manner (0 to 100 ng of P-LPS extract per ml). P-LPS extract (100 ng/ml) significantly decreased BN formation to 27% of the control value and inhibited ALPase activity to approximately 60% of the control level on days 10 to 21 but did not affect RC cell proliferation and viability. P-LPS extract time-dependently suppressed the expression of ALPase mRNA, with an inhibitory pattern similar to that of enzyme activity. The expression of mRNAs for osteocalcin and osteopontin, matrix proteins related to bone metabolism, was markedly suppressed by P-LPS extract. Furthermore, P-LPS extract increased the expression of mRNAs for CD14, LPS receptor, and interleukin-1 in RC cells. These results indicate that P-LPS inhibits osteoblastic-cell differentiation and suggest that LPS-induced bone resorption in periodontal disease may be mediated by effects on osteoblastic as well as osteoclastic cells.