Aims: Diabetes mellitus is associated with bone loss, increased fracture rate and reduced bone healing. Accumulation of advanced glycation end products (AGE) and associated overexpression of the receptor for AGE (RAGE) have been implicated in the pathogenesis of bone disease in diabetes. Although the AGE-RAGE interaction is well known for the sustained induction of inflammatory process, the physiologic role of RAGE in bone tissue is not clear. Remarkably, RAGE deficiency induces a proinflammatory phenotype in bones and osteoblasts. Therefore, we aimed to study the mechanism of underlying inflammatory processes in RAGE deficient osteoblasts as well as to reveal the intricate signaling events that link RAGE deficiency and inflammation in bones from RAGE knock-out (RAGE-/-) mice. Methods: Osteoblasts from wild type (WT, C57BL/6) and RAGE-/- mice were transiently transfected with different plasmids and siRNA. Reporter gene assay, western blotting, PCR, immunoprecipitation and chromatin immunoprecipitation techniques were employed to study the expression and interactions of transcription factors and coactivators involved in the signaling pathways. Results: The proinflammatory phenotype in the bones and osteoblasts from RAGE-/- mice was associated with reduced protein and gene expression and intranuclear translocation of the anti-inflammatory nuclear receptor PPAR-a. Moreover, PPAR-a activation by Wy14643 reversed inflammation in osteoblasts from RAGE-/- mice, suggesting that the lack of PPAR-a in RAGE deficiency is responsible for the proinflammatory phenotype. We therefore analyzed the PPAR-a promoter, which contains a series of Sp1 binding sites, to understand the regulation of PPAR-a gene expression. PPAR-a promoter driven reporter gene expression was much lower in RAGE-/- osteoblasts compared to WT osteoblasts. In addition, Sp1 overexpression significantly increased PPAR-a promoter activity in WT osteoblasts, but had only marginal effects in RAGE-/- osteoblasts. Sequential promoter deletions confirmed the strong Sp1 dependency in WT osteoblasts, which was largely blunted in RAGE-/- osteoblasts. However, suppression of Sp1 by siRNA transfection decreased PPAR-a promoter expression by around 50% in both WT and RAGE-/- osteoblasts. Remarkably, endogenous Sp1 gene and protein expression was similar in osteoblasts from WT and RAGE-/- mice, suggesting that a cofactor for PPAR-a gene expression is missing in RAGE-/- osteoblasts. Noteworthy, preliminary data show that the PPAR-g coactivator-1a (PGC-1a) is markedly reduced in RAGE-/- osteoblasts compared to WT osteoblasts. Conclusions: RAGE deficiency induces a proinflammatory phenotype in bones and osteoblasts through PPAR-a insufficiency. Transcription factor Sp1 is a strong regulator of PPAR-a expression however this regulation is inadequate in RAGE deficiency most likely due to the absence of an essential cofactor such as PGC-1a.