Bortezomib is a first-in-class proteasome inhibitor approved for the therapy of relapsed, refractory multiple myeloma (MM). Two large registration trials (SUMMIT and APEX) of bortezomib in MM revealed an increase in the serum levels of bone-specific alkaline phosphatase (b-ALP) and osteocalcin (ocn) in bortezomib-responsive patients, raising the prospect that bortezomib may influence the bone marrow (BM) microenvironment in association with its anti-myeloma effect,. However, the precise cellular target of bortezomib within the BM milieu remains unknown. We hypothesized that the observed rise in b-ALP and ocn was the result of direct effects of bortezomib on osteoblast-lineage committed cells. The effect of bortezomib on osteoblastic cells was first evaluated in in vitro. When bortezomib was added to freshly isolated primary BM mononuclear cells, the CFU-Ob (osteoblastic colony-forming units) was unchanged, but the colony size was increased, with a maximum effect observed at 1 nM. In particular, bortezomib increased the number of CD45−/CD51+ cells 1.8 fold (P<0.05), while no change was noted in the CD45+ (hematopoietic) cells. These CD45−/CD51+ cells expressed Collagen-1 and b-ALP, rapidly formed VanKossa+ bone nodules in vitro and lacked the expression of Sca1 and Collagen-II, suggesting that they were of osteoblastic lineage. When mice were treated with bortezomib (0.1mg/kg biw for 3 weeks), a significant increase in CD45−/CD51+ cells was observed in the bone marrow suggesting bortezomib increases the number of osteoblast-lineage cells in vivo. Next, we sought to identify the target cell for bortezomib activity. We treated CD45− BMSCs with bortezomib in vitro for 7 days and then exposed these cells to either adipogenic or osteogenic media (with bortezomib now removed). Interestingly, both differentiated osteoblasts (i.e Van-Kossa+ cells) and adipocytes (Oil-Red staining cells) were increased, suggesting that bortezomib increases the proliferation of a bipotent MPC. We then studied the impact of bortezomib on the commitment of MPCs towards osteoblastic or adipocytic lineages by culturing CD45− cells in osteogenic and adipogenic media with concurrent treatment with bortezomib. In these conditions, we found an increased number of Alk-Phos + osteoblasts in bortezomib-treated cells and a decreased number of adipocytes in adipogenic media. These data suggest that bortezomib (a) increases the proliferation of uncommitted MPCs and (b) promotes the differentiation towards osteoblastic lineage. To investigate the mechanism of bortezomib action, we studied the effect of forskolin, a cyclic AMP analogue known to accelerate the ubiquitin-mediated degradation of RUNX-2, the master-regulator of osteogenic differentiation. Forskolin treatment abrogated the effect of bortezomib on CD45− BMSCs, suggesting that bortezomib activity is influenced by the adenylate cyclase pathway, possibly through bortezomib-mediated inhibition of RUNX-2 degradation. Bortezomib alters primitive mesenchymal cell function causing increased osteoblast lineage cells.