Glucocorticoids and sex-steroids can modulate osteogenesis in vivo and in vitro. Although the effects of glucocorticoids on bone cells in vitro have been described in detail, the role of sex-steroids is not as well defined. We examined whether sex-steroids influence bone metabolism indirectly by regulating glucocorticoid effects on bone. Interactions of the sex-steroid progesterone or its analog RU38486 with the glucocorticoid dexamethasone (dex) were studied in functional assays of osteogenesis. Three osteoblastic models were evaluated: (1) the rat bone marrow stromal cell (RBMC) nodule system; (2) the chick periosteal osteogenesis (CPO) model; and (3) ROS 17/2.8 cells. RU38486, progesterone, and unlabelled dex competitively inhibited 3H-dex uptake by ROS 17/2.8 cells as well as its (3H-dex) binding to cytosol preps. Both RU38486 and progesterone inhibited dex-induced increases in alkaline phosphatase in CPO cultures, in RBMC cultures, and in ROS 17/2.8 cells. Dex-induced decreases in cell proliferation in ROS 17/2.8 cells were reversed by RU38486 but dex-induced increases in proliferation in the CPO model were not affected. In CPO cultures, dex-induced increases in collagen synthesis were inhibited completely by RU38486 and progesterone. Dex-dependent nodule formation in the RBMC was blocked by RU38486. Both RU38486 and dex mediated reduction of calcium uptake in the CPO model but did not affect mineralized tissue area. The data indicate that RU38486 and progesterone competitively inhibit dex-mediated stimulation of osteogenesis in vitro; this inhibition is exerted on early but not late stage differentiation events of osteoprogenitor cells.