Wnt-induced secreted protein-1 (WISP-1), like other members of the CCN family, is expressed in skeletal tissues. Its mechanism of action remains unknown. Expression of WISP-1 was analyzed in human bone marrow stroma cells (hBMSC) by RT-PCR. We identified two major transcripts corresponding to those of full-length WISP-1, and of the splice variant WISP-1va which lacks a putative BMP/TGF-beta binding site. To investigate the function of WISP-1 in bone, hBMSC cultures were treated with recombinant human (rh)WISP-1 and analyzed for proliferation and osteogenic differentiation. WISP-1 treatment increased both BrdU incorporation and alkaline phosphatase (AP) activity. Considering the known functional synergy found between the TGF-beta super-family and members of the CCN family, we next tested the effect of WISP-1 on TGF-beta1 activity. We found that rhWISP-1 could reduce rhTGF-beta1 induced BrdU incorporation. Similarly, rhTGF-beta1 inhibited rhWISP-1 induction of AP activity. To explore functional differences between the WISP-1 variants, WISP-1 or WISP-1va were transfected into hBMSC. Both variants could strongly induce BrdU incorporation. However, there were no effects of either variant on AP activity without an additional osteogenic stimulus such as TGF-beta1. Taken together our results suggest a functional relationship between WISP-1 and TGF-beta1. To further define this relationship we analyzed the effect of WISP-1 on TGF-beta signaling. rhWISP-1 significantly reduced TGF-beta1 induced phosphorylation of Smad-2. Our data indicates that full-length WISP-1 and its variant WISP-1va are modulators of proliferation and osteogenic differentiation, and may be novel regulators of TGF-beta1 signaling in osteoblast-like cells.