Osteoblasts are cells responsible for matrix deposition during bone development and although temporal expression of many genes has been related to osteoblast differentiation, a complete description of osteoblast‐specific gene regulation will lead to a better understanding of osteoblast function. In this study, microarray technology was used to analyze gene expression on a broad scale during osteoblast differentiation. Expression analysis of 9596 sequences revealed 342 genes and expressed sequence tags (ESTs) to be modulated differentially during a time course experiment in which murine C2C12 mesenchymal progenitor cells were induced to differentiate into mature osteoblasts by treatment with bone morphogenetic protein 2 (BMP‐2). By means of hierarchical clustering, these genes were grouped by similarities in their expression profiles, resulting in subsets of early, intermediate, and late response genes, which are representative of the distinct stages of osteoblast differentiation. To identify new bone markers, the bone specificity of the late response genes was determined by comparing BMP‐induced expression in C2C12 and MC3T3 osteoblasts with that in NIH3T3 fibroblasts. This resulted in the identification of nine novel genes and ESTs that were induced specifically in osteoblasts, in addition to the well‐known markers ALP and osteocalcin. For at least one of these novel genes, Wnt inhibitory factor 1, and two of the ESTs, expression in developing bone was verified in vivo by in situ hybridization of E16.5 mouse embryos. In conclusion, by a combination of in vitro and in vivo screening approaches, a set of new genes related to osteoblast differentiation and skeletal development has been identified.