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The transcription factor Sox4 is vital for fetal development, as Sox4–/– homozygotes die in utero. Sox4 mRNA is expressed in the early embryonic growth plate and is regulated by parathyroid hormone, but its function in bone modeling/remodeling is unknown. We report that Sox4+/– mice exhibit significantly lower bone mass (by dual-energy X-ray absorptiometry) from an early age, and fail to obtain the peak bone mass of wild-type (WT) animals. Microcomputed tomography (μCT), histomorphometry and biomechanical testing of Sox4+/– bones show reduced trabecular and cortical thickness, growth plate width, ultimate force and stiffness compared with WT. Bone formation rate (BFR) in 3-month-old Sox4+/– mice is 64% lower than in WT. Primary calvarial osteoblasts from Sox4+/– mice demonstrate markedly inhibited proliferation, differentiation and mineralization. In these cultures, osterix (Osx) and osteocalcin (OCN) mRNA expression was reduced, whereas Runx2 mRNA was unaffected. No functional defects were found in osteoclasts. Silencing of Sox4 by siRNA in WT osteoblasts replicated the defects observed in Sox4+/– cells. We demonstrate inhibited formation and altered microarchitecture of bone in Sox4+/– mice versus WT, without apparent defects in bone resorption. Our results implicate the transcription factor Sox4 in regulation of bone formation, by acting upstream of Osx and independent of Runx2.