Tumor necrosis factor‐alpha (TNF‐α) is a major mediator of inflammatory responses in many diseases that inhibits bone formation and stimulates bone resorption. To determine molecular mechanisms involved in the suppression of bone formation we have analyzed the effects of TNF‐α on BSP gene expression. Bone sialoprotein (BSP) is a mineralized tissue‐specific protein that appears to function in the initial mineralization of bone. Previous studies have demonstrated that BSP mRNA expression is essentially restricted to fully‐differentiated cells of mineralized connective tissues and that the expression of BSP is developmentally regulated. Treatment of rat osteosarcoma ROS 17/2.8 cells with TNF‐α (10 ng/ml) for 24 h caused a marked reduction in BSP mRNA levels. The addition of antioxidant N‐acetylcysteine (NAC; 20 mM) 30 min prior to stimulation with TNF‐α attenuated the inhibition of BSP mRNA levels. Transient transfection analyses, using chimeric constructs of the rat BSP gene promoter linked to a luciferase reporter gene, revealed that TNF‐α (10 ng/ml) suppressed expression in all constructs, including a short construct (pLUC3; nts −116 to +60), transfected into ROS17/2.8 cells. Further deletion analysis of the BSP promoter showed that a region within nts −84 to −60 was targeted by TNF‐α, the effects which were inhibited by NAC and the tyrosine kinase inhibitor, herbimycin A (HA). Introduction of 2bp mutations in the inverted CCAAT box (ATTGG; nts −50 and −46), a putative cAMP response element (CRE; nts −75 to −68), and a FGF response element (FRE; nts −92 to −85) showed that the TNF‐α effects were mediated by the CRE. These results were supported by gel mobility shift assays, using a radiolabeled double‐stranded CRE oligonucleotide, which revealed decreased binding of a nuclear protein from TNF‐α‐stimulated ROS 17/2.8 cells. Further, the inhibitory effect of TNF‐α on CRE DNA–protein complex was completely abolished by NAC or HA treatment. These studies, therefore, show that TNF‐α suppresses BSP gene transcription through a tyrosine kinase‐dependent pathway that generates reactive oxygen species and that the TNF‐α effects are mediated by a CRE element in the proximal BSP gene promoter. J. Cell. Biochem. 87: 313–323, 2002. © 2002 Wiley‐Liss, Inc.