Stanniocalcin 1 (STC1) is a calcium- and phosphate-regulating hormone that is expressed in all tissues, including bone tissues, and is involved in calcium and phosphate homeostasis. Previously, STC1 expression was found to be increased by 1,25-dihydroxyvitamin D3 [1,25(OH)2D3] administration in renal proximal tubular cells. In this study, we investigated whether STC1 directly regulates osteoblast differentiation or reciprocally controls the effects of 1,25(OH)2D3 on osteoblasts to contribute to bone homeostasis. We found that STC1 inhibited osteoblast differentiation in vitro and bone morphogenetic protein 2 (BMP2)-induced ectopic bone formation in vivo. Moreover, 1,25(OH)2D3 increased STC1 expression through direct binding to the Stc1 promoter of the vitamin D receptor (VDR). STC1 activated the 1,25(OH)2D3–VDR signaling pathway through the upregulation of VDR expression mediated by the inhibition of Akt phosphorylation in osteoblasts. STC1 further increased the effects of 1,25(OH)2D3 on receptor activator of nuclear factor-κB ligand (RANKL) secretion and inhibited osteoblast differentiation by exhibiting a positive correlation with 1,25(OH)2D3. The long-bone phenotype of transgenic mice overexpressing STC1 specifically in osteoblasts was not significantly different from that of wild-type mice. However, compared with that in the wild-type mice, 1,25(OH)2D3 administration significantly decreased bone mass in the STC1 transgenic mice. Collectively, these results suggest that STC1 negatively regulates osteoblast differentiation and bone formation; however, the inhibitory effect of STC1 on osteoblasts is transient and can be reversed under normal conditions. Nevertheless, the synergistic effect of STC1 and 1,25(OH)2D3 through 1,25(OH)2D3 administration may reduce bone mass by inhibiting osteoblast differentiation.