Unique cell cycle control is instituted in confluent osteoblast cultures, driving growth to high density. The postconfluent dividing cells share features with cells that normally exit the cell cycle; p27(kip1) is increased, p21(waf1/cip1) is decreased, free E2F DNA binding activity is reduced, and E2F4 is primarily nuclear. E2F4-p130 becomes the predominant E2F-pocket complex formed on E2F sites, but, unlike the complex that typifies resting cells, cyclin A and CDK2 are also present. Administration of dexamethasone at this, but not earlier stages, results in reduction of cyclin A and CDK2 levels with a parallel decrease in the associated kinase activity, dissociation of cyclin A-CDK2 from the E2F4-p130 complexes, and inhibition of G(1)/S transition. The glucocorticoid-mediated cell cycle attenuation is also accompanied by, but not attributable to, increased p27(kip1) and decreased p21(waf1/cip1) levels. The attenuation of osteoblast growth to high density by dexamethasone is associated with severe impairment of mineralized extracellular matrix formation, unless treatment commences in cultures that have already grown to high density. Both the antimitotic and the antiphenotypic effects are reversible, and both are antagonized by RU486. Thus, glucocorticoids induce premature attenuation of the osteoblast cell cycle, possibly contributing to the osteoporosis induced by these drugs in vivo.