Members of the ephrin and Eph family are local mediators of cell function through largely contact-dependent processes in development and in maturity. Production of ephrinB2 mRNA and protein are increased by PTH and PTHrP in osteoblasts. Both a synthetic peptide antagonist of ephrinB2/EphB4 receptor interaction and recombinant soluble extracellular domain of EphB4 (sEphB4), which is an antagonist of both forward and reverse EphB4 signaling, were able to inhibit mineralization and the expression of several osteoblast genes involved late in osteoblast differentiation. The findings are consistent with ephrinB2/EphB4 signaling within the osteoblast lineage having a paracrine role in osteoblast differentiation, in addition to the proposed role of osteoclast-derived ephrinB2 in coupling of bone formation to resorption. This local regulation might contribute to control of osteoblast differentiation and bone formation at remodeling sites, and perhaps also in modeling.