Although bone morphogenetic protein (BMP) is the major driver of osteoblastic bone formation, the direct target genes to regulate osteogenesis remain unclear. Here, we purified Atonal Homolog 8 (Atoh8) gene to be up-regulated upon BMP-2 stimulation in mouse bone marrow stroma cells ST-2 by microarray assay. In MC3T3-E1 osteoblasts, expression of Atoh8 was confirmed by qRT-PCR to be increased from 1 h of BMP-2 induction, and subsequently elevated for over 48 h. The direct binding of BMP-activated Smad1 to the promoter region of Atoh8 gene was confirmed by chromatin immunoprecipitation and the luciferase reporter assay. Our conventional Atoh8 knockout (KO) mice line were viable and fertile. The skeletal preparation of the newborn KO mice showed mild retardation in bone formation of carvariae, claviculae and vertebral bones, although the overall body size was normal. At 8 weeks of age, KO mice were healthy whereas the body weight as well as the size were mildly reduced. The μCT and bone histomorphometry analyses of bones of KO mice revealed that bone volume was significantly decreased and bone formation was mildly suppressed, while osteoclast number was not altered. In contrast, siRNA-mediated loss of Atoh8 in ST-2 and MC3T3-E1 cells significantly enhanced BMP-induced osteoblast differentiation while primary KO osteoblasts showed strongly promoted osteogenesis in vitro. The conflicting results in bone formation by loss of Atoh8 between cell culture and mice in vivo might be due to the level of existing BMP signaling that exogenous BMP stimulation in culture should evoke artificial effects. In addition, because Atoh8 is a transcriptional repressor while loss of Atoh8 significantly increased Runx2 expression in osteoblast culture, Atoh8 may be a Runx2 down-regulator. Hence the mechanism underlying the reduced bone mass in Atoh8 KO mice may be similar to that had shown in Runx2 transgenic mice.