Several members of the fibroblast growth factor (FGF) family have an important role in the development of skeletal tissues. FGF-8 is widely expressed in the developing skeleton, but its function there has remained unknown. We asked in this study whether FGF-8 could have a role in the differentiation of mesenchymal stem cells to an osteoblastic lineage. Addition of FGF-8 to mouse bone marrow cultures effectively increased initial cell proliferation as well as subsequent osteoblast-specific alkaline phosphatase production, bone nodule formation, and calcium accumulation if it was added to the cultures at an early stage of osteoblastic differentiation. Exogenous FGF-8 also stimulated the proliferation of MG63 osteosarcoma cells, which was blocked by a neutralizing antibody to FGF-8b. In addition, the heparin-binding growth factor fraction of Shionogi 115 (S115) mouse breast cancer cells, which express and secrete FGF-8 at a very high level, had an effect in bone marrow cultures similar to that of exogenous FGF-8. Interestingly, experimental nude mouse tumors of S115 cells present ectopic bone and cartilage formation as demonstrated by typical histology and expression of markers specific for cartilage (type II and IX collagen) and bone (osteocalcin). These results demonstrate that FGF-8 effectively predetermines bone marrow cells to differentiate to osteoblasts and increases bone formation in vitro. It is possible that FGF-8 also stimulates bone formation in vivo. The results suggest that FGF-8, which is expressed by a great proportion of malignant breast and prostate tumors, may, among other factors, also be involved in the formation of osteosclerotic bone metastases.