Wnt signaling is critical for skeletal development and homeostasis. Sclerostin (Sost) has emerged as a potent inhibitor of Wnt signaling and, thereby, bone formation. Thus, strategies to reduce sclerostin expression may be used to treat osteoporosis or non-union fractures. Transforming growth factor-beta (TGF-β) elicits various effects upon the skeleton both in vitro and in vivo depending on the duration and timing of administration. In vitro and in vivo studies demonstrate that TGF-β increases osteoprogenitor differentiation but decreases matrix mineralization of committed osteoblasts. Because sclerostin decreases matrix mineralization, this study aimed to examine whether TGF-β achieves such inhibitory effects via transcriptional modulation of Sost. Using the UMR106.01 mature osteoblast cell line, we demonstrated that TGF-βTGF-β(1)-β(2)-β(3) and Activin A increase Sost transcript expression. Pharmacologic inhibition of Alk4/5/7 in vitro and in vivo decreased endogenous Sost expression, and siRNA against Alk4 and Alk5 demonstrated their requirement for endogenous Sost expression. TGF-β(1) targeted the Sost bone enhancer ECR5 and did not affect the transcriptional activity of the endogenous Sost promoter. These results indicate that TGF-β(1) controls Sost transcription in mature osteoblasts, suggesting that sclerostin may mediate the inhibitory effect of TGF-β upon osteoblast differentiation.