The mechanisms whereby the parathyroid hormone (PTH) exerts its anabolic action on bone are incompletely understood. We previously showed that inhibition of ERK1/2 enhanced Smad3-induced bone anabolic action in osteoblasts. These findings suggested the hypothesis that changes in gene expression associated with the altered Smad3-induced signaling brought about by an ERK1/2 inhibitor would identify novel bone anabolic factors in osteoblasts. We therefore performed a comparative DNA microarray analysis between empty vector-transfected mouse osteoblastic MC3T3-E1 cells and PD98059-treated stable Smad3-overexpressing MC3T3-E1 cells. Among the novel factors, Tmem119 was selected on the basis of its rapid induction by PTH independent of later increases in endogenous TGF-β. The levels of Tmem119 increased with time in cultures of MC3T3-E1 cells and mouse mesenchymal ST-2 cells committed to the osteoblast lineage by BMP-2. PTH stimulated Tmem119 levels within 1 h as determined by Western blot analysis and immunocytochemistry in MC3T3-E1 cells. MC3T3-E1 cells stably overexpressing Tmem119 exhibited elevated levels of Runx2, osteocalcin, alkaline phosphatase, and β-catenin, whereas Tmem119 augmented BMP-2-induced Runx2 levels in mesenchymal cells. Tmem119 interacted with Runx2, Smad1, and Smad5 in C2C12 cells. In conclusion, we identified a Smad3-related factor, Tmem119, that is induced by PTH and promotes differentiation in mouse osteoblastic cells. Tmem119 is an important molecule in the pathway downstream of PTH and Smad3 signaling in osteoblasts.