We had previously identified the cDNA for a novel protein called osteoblast-specific factor 2 (OSF-2) from an MC3T3-E1 cDNA library using subtraction hybridization and differential screening techniques. Here we describe the localization, regulation, and potential function of this protein. Immunohistochemistry using specific antiserum revealed that in adult mice, the protein is preferentially expressed in periosteum and periodontal ligament, indicating its tissue specificity and a potential role in bone and tooth formation and maintenance of structure. Based on this observation and the fact that other proteins have been called OSF-2, the protein was renamed "periostin." Western blot analysis showed that periostin is a disulfide linked 90 kDa protein secreted by osteoblasts and osteoblast-like cell lines. Nucleotide sequence revealed four periostin transcripts that differ in the length of the C-terminal domain, possibly caused by alternative splicing events. Reverse transcription- polymerase chain reaction analysis revealed that these isoforms are not expressed uniformly but are differentially expressed in various cell lines. Both purified periostin protein and the periostin-Fc recombinant protein supported attachment and spreading of MC3T3-E1 cells, and this effect was impaired by antiperiostin antiserum, suggesting that periostin is involved in cell adhesion. The protein is highly homologous to betaig-h3, a molecule induced by transforming growth factor beta (TGF-beta) that promotes the adhesion and spreading of fibroblasts. Because TGF-beta has dramatic effects on periosteal expansion and the recruitment of osteoblast precursors, this factor was tested for its effects on periostin expression. By Western blot analysis, TGF-beta increased periostin expression in primary osteoblast cells. Together, these data suggest that periostin may play a role in the recruitment and attachment of osteoblast precursors in the periosteum.