Bone-forming osteoblasts differentiate from pluripotent mesenchymal stem cells (MSCs) in a multistage process that can be modeled in vitro using MSCs isolated from adult human trabecular bone or bone marrow. To identify new genes involved in osteoblast differentiation, we have performed large-scale gene expression profiling using high-density cDNA microarrays in primary human MSCs treated with the known osteogenic agent bone morphogenetic protein 2 (BMP-2). The vascular endothelial growth factor (VEGF) family member placental growth factor (PlGF) was found as an early regulated gene whose induction was already detected after 2 h treatment with BMP-2. Tissue distribution analysis of PlGF mRNA expression using microarrays revealed a very restricted expression of PlGF only in BMP-2-treated MSCs and in placenta as expected. Ribonuclease protection assay (RPA) confirmed the induction of PlGF and showed preferential expression of the PlGF-1 isoform over PLGF-2 in MSCs and MG63 cells. BMP-2 stimulated PlGF expression in MG63 cells with an EC50 of about 50 ng/ml and mRNA levels peaked between 24 and 32 h after stimulation. Furthermore, induction of PlGF by BMP-2 appeared specific, as other osteogenic agents including vitamin D3, transforming growth factor beta, and basic fibroblast growth factor were inactive. BMP-2 stimulated PlGF secretion from MG63 and MSC cells, but PlGF had no effect on MSC proliferation and osteoblastic differentiation. Based on the known function of PlGF in the recruitment of endothelial and hematopoietic stem cells, these results suggest a paracrine role for MSC-derived PlGF in the angiogenesis and hematopoiesis that accompany BMP-2-induced bone formation.