Nucleotides are released from cells in response to mechanical stimuli and signal in an autocrine/paracrine manner through cell surface P2 receptors. P2rx7-/- mice exhibit diminished appositional growth of long bones and impaired responses to mechanical loading. We find that calvarial sutures are wider in P2rx7-/- mice. Functional P2X7 receptors are expressed on osteoblasts in situ and in vitro. Activation of P2X7 receptors by exogenous nucleotides stimulates expression of osteoblast markers and enhances mineralization in cultures of rat calvarial cells. Moreover, osteogenesis is suppressed in calvarial cell cultures from P2rx7-/- mice compared with the wild type. P2X7 receptors couple to production of the potent lipid mediators lysophosphatidic acid (LPA) and prostaglandin E2. Either an LPA receptor antagonist or cyclooxygenase (COX) inhibitors abolish the stimulatory effects of P2X7 receptor activation on osteogenesis. We conclude that P2X7 receptors enhance osteoblast function through a cell-autonomous mechanism. Furthermore, a novel signaling axis links P2X7 receptors to production of LPA and COX metabolites, which in turn stimulate osteogenesis.