TGFβ is known as a canonical coupling factor based on its effects on bone formation and bone resorption. There are 3 different isoforms of it related to bone metabolism in mammals. TGFβ function in vivo is complicated, and each isoform shows a different function. Since TGFβs are secreted during inflammation accompanied by the release of latent TGFβ from inside of the bones where they are stored in the extracellular matrix, TGFβ function is potentially related to fracture healing. Although a few reports examined the TGFβ expression during fracture healing, the function of TGFβ in this process is poorly understood. To investigate TGFβ function during fracture healing in vivo, we used the fracture healing model of the medaka fish, which enabled us to observe the behavior and function of living cells in response to a bone-specific injury. RNA in-situ hybridization analysis showed that only tgfβ-2 of the 4 TGFβ isoforms in medaka was expressed in the bone-forming region. To examine the TGFβ-2 function for bone formation by osteoblasts, we used a medaka transgenic line, Tg (type X collagen: GFP); and the results revealed that type X collagen-positive immature osteoblasts migrated to the fracture site and differentiated to osterix-positive osteoblasts. However, only a few type X collagen-positive osteoblasts exhibited BrdU incorporation after the fracture. Then we inhibited TGFβ signaling by using a chemical TGFβ receptor kinase inhibitor (SB431542), and demonstrated that inhibition of TGFβ strongly impaired osteoblast migration and differentiation. In addition, this TGFβ inhibitor reduced the RANKL expression and caused a delay of osteoclast differentiation. Our findings thus demonstrated that TGFβ-2 functioned specifically during fracture healing to stimulate the migration of osteoblasts as well as the differentiation of osteoblasts and osteoclasts.