GSK-3, a component of the canonical Wnt signaling pathway, is implicated in regulation of bone mass. The effect of a small molecule GSK-3 inhibitor was evaluated in pre-osteoblasts and in osteopenic rats. GSK-3 inhibitor induced osteoblast differentiation in vitro and increased markers of bone formation in vitro and in vivo with concomitant increased bone mass and strength in rats. Inactivation of glycogen synthase kinase -3 (GSK-3) leads to stabilization, accumulation, and translocation of beta-catenin into the nucleus to activate downstream Wnt target genes. To examine whether GSK-3 directly regulates bone formation and mass we evaluated the effect of 603281-31-8, a small molecule GSK-3 alpha/beta dual inhibitor in preosteoblastic cells and in osteopenic rats. Murine mesenchymal C3H10T1/2 cells were treated with GSK-3 inhibitor (603281-31-8) and assayed for beta-catenin levels, activity of Wnt-responsive promoter, expression of mRNA for bone formation, and adipogenic markers and alkaline phosphatase activity. In vivo, 6-month-old rats were ovariectomized (OVX), allowed to lose bone for 1 month, and treated with GSK-3 inhibitor at 3 mg/kg/day orally for 60 days. At the end of treatment, BMD was measured by DXA, bone formation rate by histomorphometry, vertebral strength (failure in compression), and the expression levels of osteoblast-related genes by real-time PCR. Treatment of C3H10T1/2 cells with the GSK-3 inhibitor increased the levels of beta-catenin accompanied by activation of Wnt-responsive TBE6-luciferase reporter gene. This was associated with an increased expression of mRNA for bone sialoprotein (1.4-fold), collagen alpha1 (I) (approximately 2-fold), osteocalcin (1.2-fold), collagen alpha1(V) (1.5-fold), alkaline phosphatase (approximately 160-fold), and runx2 (1.6-fold), markers of the osteoblast phenotype and bone formation activity. Alkaline phosphatase mRNA expression paralleled alkaline phosphatase activity. The mRNA levels of collagens alpha1 (I), alpha1 (V), biglycan, osteonectin, and runx-2 increased on treatment with the GSK-3 inhibitor in rat femur compared with the OVX control. DXA analyses revealed significant increases in BMC and BMD in cancellous and cortical bone of OVX rats treated with GSK-3 inhibitor. This was associated with increased strength (peak load, energy, and stiffness) assessed by lumbar vertebra load to failure in compression. Histomorphometric analyses showed that 603281-31-8 robustly increased bone formation but did not exclude a small effect on osteoclasts (resorption). An orally active, small molecule GSK-3 inhibitor induced osteoblast differentiation and increased markers of bone formation in vitro, and increased markers of bone formation, bone mass, and strength in vivo, consistent with a role for the canonical Wnt pathway in osteogenesis.