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Primary cilia are appendages observed in most types of cells, and serve as cellular antennae for sensing environmental signals. Evidence is accumulating that correct ciliogenesis and ciliary functions are indispensable for normal skeletal development by regulating signaling pathways important for bone development. However, whether ciliogenesis is regulated by bone-related factors in osteoblasts is largely unknown. Here we show that Kruppel-Like Factor 4 (KLF4), which is known to repress osteoblast differentiation, supports the formation and maintenance of cilia in cultured osteoblasts; however, the length of the cilia observed in KLF4-induced cells were significantly shorter compared to the control cells. Basal Hedgehog signaling was repressed by KLF4. Significantly, activating Hedgehog signaling using a Smoothened agonist significantly rescued osteoblast mineralization and osteoblastic gene expressions. Global gene expression analysis showed that KLF4 induced number of genes including the nuclear receptor, Pregnane X receptor (PXR), and PXR repressed calvarial osteoblast mineralization and repressed Gli1 expression similar as the effect observed by inducing KLF4. Our results implicate that KLF4 plays important roles for maintaining osteoblasts in an immature state by repressing basal activation of the Hedgehog signaling.