Osteocytes are the most abundant cells in bone and there is increasing evidence that they control bone remodeling via direct cell-to-cell contacts and by soluble factors. In the present study, we have used the MLO-Y4 cell line to study the effect of osteocytes on the proliferation, differentiation and bone-forming capacity of bone marrow mesenchymal stem cells (MSC). Conditioned media (CM) from osteocytic MLO-Y4 and osteoblastic MC3T3-E1 cell lines were collected and added on mouse bone marrow cultures, in which MSC were induced to osteoblasts. There was a significant increase in alkaline phosphatase activity and osteocalcin expression in the presence of MLO-Y4 CM. No such stimulus could be observed with MC3T3-E1 CM. There was almost 4-fold increase in bone formation and up to 2-fold increase in the proliferation of MSC with MLO-Y4 CM. The highly proliferating bone marrow cells were negative for ALP and OCN, suggesting that they could represent early osteoblast precursors. MLO-Y4 CM did not enhance the viability of mature osteoblasts nor protected them of apoptosis. This is the first study to describe soluble signals between osteocytes and osteoblasts and there most likely are several still unidentified or unknown factors in osteocyte CM. We conclude that osteocytes have an active stimulatory role in controlling bone formation.