CCAAT/enhancer binding proteins (C/EBPs) are expressed by osteoblasts and adipocytes during differentiation. C/EBPβ is critical for adipogenesis; however, its role in osteoblastogenesis is unclear, and its function in the postnatal skeleton is not known. To study C/EBPβ in osteoblasts in vivo, we created transgenic mice expressing full length C/EBPβ under the control of a 3.8 kb fragment of the human osteocalcin promoter. Two transgenic lines were established in a friend leukemia virus strain B genetic background, and compared with wild type littermate controls. Both C/EBPβ transgenic lines exhibited osteopenia, with a 30% decrease in bone volume, due to a decrease in trabecular number. The number of osteoblasts and osteoclasts per bone perimeter was not changed. Bone marrow stromal cells from C/EBPβ transgenics showed reduced mineralization, and reduced alkaline phosphatase mRNA levels. Calvarial osteoblasts from C/EBPβ transgenics displayed reduced alkaline phosphatase activity. To determine the consequences of the Cebpb deletion in vivo, the phenotype of Cebpb null mice was compared with that of wild type controls of identical genetic composition. Cebpb null mice exhibited reduced weight, body fat, and bone mineral density, and decreased bone volume, due to a decrease in trabecular number. The number of osteoblasts and osteoclasts per bone perimeter was not changed. C/EBPβ downregulation by RNA interference in calvarial osteoblasts had no effect on osteoblast differentiation/function. The phenotype of the Cebpb inactivation may be secondary to systemic indirect effects, and to direct effects of C/EBPβ in osteoblasts. In conclusion, C/EBPβ plays a role in mesenchymal cell differentiation and its misexpression in vivo causes osteopenia.