Osteoblast (OB) differentiation is suppressed by tumor necrosis factor-alpha (TNF-alpha), an inflammatory stimulus that is elevated in arthritis and menopause. Because OB differentiation requires the expression of the transcription factor osterix (Osx), we investigated TNF effects on Osx. TNF inhibited Osx mRNA in pre-osteoblastic cells without affecting Osx mRNA half-life. Inhibition was independent of new protein synthesis. Analysis of the Osx promoter revealed two transcription start sites that direct the expression of an abundant mRNA (Osx1) and an alternatively spliced mRNA (Osx2). Promoter fragments driving the expression of luciferase were constructed to identify TNF regulatory sequences. Two independent promoters were identified upstream of each transcription start site. TNF potently inhibited transcription of both promoters. Deletion and mutational analysis identified a TNF-responsive region proximal to the Osx2 start site that retained responsiveness when inserted upstream of a heterologous promoter. The TNF response region was a major binding site for nuclear proteins, although TNF did not change binding at the site. The roles of MAPK and NFkappaB were investigated as signal mediators of TNF. Inhibitors of MEK1 and ERK1, but not of JNK or p38 kinase, abrogated TNF inhibition of Osx mRNA and promoter activity. TNF action was not prevented by blockade of NFkappaB nuclear entry. The forced expression of high levels of NFkappaB uncovered a proximal promoter enhancer; however, this site was not activated by TNF. The inhibitory effect of TNF on Osx expression may decrease OB differentiation in arthritis and osteoporosis.