The osteogenic Runt-related (Runx2) transcription factor negatively regulates proliferation and ribosomal gene expression in normal diploid osteoblasts, but is up-regulated in metastatic breast and prostate cancer cells. Thus, Runx2 may function as a tumor suppressor or an oncogene depending on the cellular context. Here we show that Runx2-deficient primary osteoblasts fail to undergo senescence as indicated by the absence of beta-gal activity and p16(INK4a) tumor suppressor expression. Primary Runx2-null osteoblasts have a growth advantage and exhibit loss of p21(WAF1/CIP1) and p19(ARF) expression. Reintroduction of WT Runx2, but not a subnuclear targeting-defective mutant, induces both p21(WAF/CIP1) and p19(ARF) mRNA and protein resulting in cell-cycle inhibition. Accumulation of spontaneous phospho-H2A.X foci, loss of telomere integrity and the Mre11/Rad50/Nbs1 DNA repair complex, and a delayed DNA repair response all indicate that Runx2 deficiency leads to genomic instability. We propose that Runx2 functions as a tumor suppressor in primary diploid osteoblasts and that subnuclear targeting contributes to Runx2-mediated tumor suppression.