Genetic mutations of Twist, a basic helix-loop-helix transcription factor, induce premature fusion of cranial sutures in Saethre-Chotzen syndrome (SCS). We report here a previously undescribed mechanism involved in the altered osteoblastogenesis in SCS. Cranial osteoblasts from an SCS patient with a Twist mutation causing basic helix-loop-helix deletion exhibited decreased expression of E3 ubiquitin ligase Cbl compared with wild-type osteoblasts. This was associated with decreased ubiquitin-mediated degradation of phosphatidyl inositol 3 kinase (PI3K) and increased PI3K expression and PI3K/Akt signaling. Increased PI3K immunoreactivity was also found in osteoblasts in histological sections of affected cranial sutures from SCS patients. Transfection with Twist or Cbl abolished the increased PI3K/Akt signaling in Twist mutant osteoblasts. Forced overexpression of Cbl did not correct the altered expression of osteoblast differentiation markers in Twist mutant cells. In contrast, pharmacological inhibition of PI3K/Akt, but not ERK signaling, corrected the increased cell growth in Twist mutant osteoblasts. The results show that Twist haploinsufficiency results in decreased Cbl-mediated PI3K degradation in osteoblasts, causing PI3K accumulation and activation of PI3K/Akt-dependent osteoblast growth. This provides genetic and biochemical evidence for a role for Cbl-mediated PI3K signaling in the altered osteoblast phenotype induced by Twist haploinsufficiency in SCS.