The bone morphogenic proteins (BMPs) play a key role in skeletal development and patterning. Using the technique of differential display polymerase chain reaction (ddPCR), we have identified a novel gene whose expression is increased during BMP-2-induced differentiation of the prechondroblastic cell line, MLB13MYC clone 17, to an osteoblastic phenotype. The 6.5-kilobase mRNA recognized by this ddPCR product is increased 10-fold by BMP-2 treatment of the MLB13MYC clone 17 cells. The mRNA recognized by this ddPCR product is also increased as MC3T3-E1 cells recapitulate the program of osteoblast differentiation during prolonged culture. The full-length transcript corresponding to this ddPCR product was cloned from a MLB13MYC clone 17 cell cDNA library. Analysis of the deduced amino acid sequence demonstrated that this gene encodes a novel 126-kDa putative serine/threonine protein kinase containing a nuclear localization signal. The kinase domain, expressed in Escherichia coli, is capable of autophosphorylation as well as phosphorylation of myelin basic protein. The gene was, therefore, named BIKe (BMP-2-Inducible Kinase). The BIKe nuclear localization signal is able to direct green fluorescent protein to the nucleus in transfected COS-7 cells. When stably expressed in MC3T3-E1 cells, BIKe significantly decreases alkaline phosphatase activity and osteocalcin mRNA levels and retards mineral deposition relative to vector control. This novel kinase, therefore, is likely to play an important regulatory role in attenuating the program of osteoblast differentiation.