Polycystin-1 (PC1) may play an important role in skeletogenesis through regulation of the bone-specific transcription factor Runx2-II. In the current study we found that PC1 co-localizes with the calcium channel polycystin-2 (PC2) in primary cilia of MC3T3-E1 osteoblasts. To establish the role of Runx2-II in mediating PC1 effects on bone, we crossed heterozygous Pkd1(m1Bei) and Runx2-II mice to create double heterozygous mice (Pkd1(+/m1Bei)/Runx2-II(+/-)) deficient in both PC1 and Runx2-II. Pkd1(+/m1Bei)/Runx2-II(+/-) mice exhibited additive reductions in Runx2-II expression that was associated with impaired endochondral bone development, defective osteoblast-mediated bone formation, and osteopenia. In addition, we found that basal intracellular calcium levels were reduced in homozygous Pkd1(m1Bei) osteoblasts. In contrast, overexpression of a PC1 C-tail construct increased intracellular calcium and selectively stimulated Runx2-II P1 promoter activity in osteoblasts through a calcium-dependent mechanism. Site-directed mutagenesis of critical amino acids in the coiled-coil domain of PC1 required for coupling to PC2 abolished PC1-mediated Runx2-II P1 promoter activity. Additional promoter analysis mapped the PC1-responsive region to the "osteoblast-specific" enhancer element between -420 and -350 bp that contains NFI and AP-1 binding sites. Chromatin immunoprecipitation assays confirmed the calcium-dependent binding of NFI to this region. These findings indicate that PC1 regulates osteoblast function through intracellular calcium-dependent control of Runx2-II expression. The overall function of the primary cilium-polycystin complex may be to sense and transduce environmental clues into signals regulating osteoblast differentiation and bone development.