Although dexamethasone (Dex) substantially enhances the osteoblastic phenotype in osteogenic cells, including human periodontal ligament (PDL) cells, the basis for this response remains poorly understood. Since the accretion of a collagenous matrix is important for an osteoblastic response and dexamethasone is known to decrease collagenase expression, we examined whether osteoblastic differentiation mediated by Dex is linked to a decrease in collagenase expression in PDL cells. Early passage human PDL cells were exposed to Dex, or ascorbic acid (AA) or beta-glycerophosphate (betaGP) alone, or in various combinations in serum-free media for 3 or 5 days. Cells exposed to Dex alone or any combinations of treatments that included Dex demonstrated increased core binding factor alpha 1 (Cbfa1), alkaline phosphatase (AP), osteonectin (ON), osteopontin (OP), bone sialoprotein (BSP) and collagen I (alpha1) expression when compared to control cells or those exposed to AA or betaGP. The induction of these osteoblastic markers was accompanied by a decrease in collagenase-1 expression. Collagenase activity showed a statistically significant strong negative relationship to Cbfa1 (Pearson's r=-0.97), AP (r=-0.87), OP (r=-0.95) and BSP (r=-0.82) in 5-day cultures, and moderately strong relationship to ON (r=-0.74) from 3 days culture. Dex also produced a dose-dependent increase in AP that was paralleled by a decrease in collagenase activity (r=-0.98). Addition of collagenase inhibitors increased AP expression while concomitantly suppressing collagenase activity. Conversely, addition of exogenous collagenase decreased the AP phenotype of the cells, which was more marked in the absence then in the presence of Dex. The findings indicate that Dex enhances specific markers of osteoblastic differentiation in PDL cells by decreasing collagenase expression, and suggest that endogenous collagenase may regulate osteoblastic differentiation of these cells.