The implantation of bone morphogenetic protein (BMP) into muscular tissues induces ectopic bone formation at the site of implantation. To investigate the mechanism underlying this process, we examined whether recombinant bone morphogenetic protein-2 (BMP-2) converts the differentiation pathway of the clonal myoblastic cell line, C2C12, into that of osteoblast lineage. Incubating the cells with 300 ng/ml of BMP-2 for 6 d almost completely inhibited the formation of the multinucleated myotubes expressing troponin T and myosin heavy chain, and induced the appearance of numerous alkaline phosphatase (ALP)-positive cells. BMP-2 dose dependently induced ALP activity, parathyroid hormone (PTH)-dependent 3',5'-cAMP production, and osteocalcin production at concentrations above 100 ng/ml. The concentration of BMP-2 required to induce these osteoblastic phenotypes was the same as that required to almost completely inhibit myotube formation. Incubating primary muscle cells with 300 ng/ml of BMP-2 for 6 d also inhibited myotube formation, whereas induced ALP activity and osteocalcin production. Incubation with 300 ng/ml of BMP-2 suppressed the expression of mRNA for muscle creatine kinase within 6 h, whereas it induced mRNA expression for ALP, PTH/PTH-related protein (PTHrP) receptors, and osteocalcin within 24-48 h. BMP-2 completely inhibited the expression of myogenin mRNA by day 3. By day 3, BMP-2 also inhibited the expression of MyoD mRNA, but it was transiently stimulated 12 h after exposure to BMP-2. Expression of Id-1 mRNA was greatly stimulated by BMP-2. When C2C12 cells pretreated with BMP-2 for 6 d were transferred to a colony assay system in the absence of BMP-2, more than 84% of the colonies generated became troponin T-positive and ALP activity disappeared. TGF-beta 1 also inhibited myotube formation in C2C12 cells, and suppressed the expression of myogenin and MyoD mRNAs without inducing that of Id-1 mRNA. However, no osteoblastic phenotype was induced by TGF-beta 1 in C2C12 cells. TGF-beta 1 potentiated the inhibitory effect of BMP-2 on myotube formation, whereas TGF-beta 1 reduced ALP activity and osteocalcin production induced by BMP-2 in C2C12 cells. These results indicate that BMP-2 specifically converts the differentiation pathway of C2C12 myoblasts into that of osteoblast lineage cells, but that the conversion is not heritable.