Osteoblasts are believed to differentiate into osteocytes, becoming embedded in bone, or to undergo apoptosis after the bone formation phase. The regulation of this terminal differentiation seems to be critical for bone homeostasis. However the mechanism remains unclear and there is no assay system currently available to analyze this process. To address this issue, we developed a new model in which osteoblasts are cultured on a type I collagen gel layer with osteogenic supplements β-glycerophosphate and ascorbic acid. Cellular behavior was analyzed by electron microscopy, immunohistochemistry and real-time RT-PCR. Osteoblasts gradually migrated into the gel, produced collagen fibrils, and differentiated to osteocytic cells with bone lacunae- and canaliculi-like mineralization. Osteocalcin, DMP-1 and SOST protein expression was mainly expressed in the migrated cells within the mid-layer of the gel. Osteoblastic (ALP and osteocalcin) and osteocytic (PHEX, DMP-1 and SOST) mRNA expression was significantly increased compared with those of the cells cultured on plastic dishes alone after 21 days. The number of TUNEL-positive apoptotic cells gradually increased, reaching a maximum at 28 days. The cells were distributed at the surface and in the mid-layer of the gel at 7 days and after 14 days of culture, respectively. These data indicate that our model reproduces transition from osteoblasts to osteocytes, suggesting the following: 1) migration of osteoblasts into collagen gel may play a critical role in osteocytic differentiation; and 2) spatiotemporal gene expression and apoptosis may be involved in the terminal differentiation of osteoblasts. Our model will make it possible to study the mechanism of transition from osteoblast to osteocyte, and both cell type-related diseases including osteoporosis and osteonecrosis.