The osteoinductive factors BMP-2 and Tmem119 that promote the differentiation of myoblasts into osteoblasts, each increase the levels of the other. However, the relative contributions of BMP-2 and Tmem119 to the osteogenic differentiation and the mechanisms involved are incompletely understood. In the present study, we examined the relationship among BMP-2, Tmem119, and the PERK-eIF2α-ATF4 endoplasmic reticulum (ER) stress response pathway in the differentiation of C2C12 myoblasts into osteoblastic cells. Both BMP-2 and Tmem119 induced levels of the osteoblast markers Runx2, Osterix, Col1a1, ALP, and osteocalcin, as well as mineralization. BMP-2 activation of the ER stress sensor PERK stimulated phosphorylation of eIF2α and led to increased biosynthesis of the osteoblast differentiation factor ATF4. When dephosphorylation of eIF2α was blocked by the selective inhibitor salubrinal, the osteogenic effects of BMP-2 and Tmem119 were enhanced further. Although BMP-2 stimulated both P-eIF2α and ATF4 levels, Tmem119 had no effect on P-eIF2α but stimulated ATF4 only. Reduction in endogenous Tmem119 levels by siRNA reduced both basal and BMP-2-stimulated levels of the ATF4 protein. In conclusion, BMP-2 stimulates differentiation of myoblasts into osteoblasts via the PERK-eIF2α-ATF4 pathway but in addition stimulates Tmem119, which itself increases ATF4. Hence, BMP-2 stimulates ATF4 both dependently and independently of the PERK-eIF2α ER stress response pathway.