A rat calvarial cell model of osteoblast differentiation using the formation of bone nodules in vitro as an endpoint was used to assess the effects of IL-1beta on osteoblast differentiation. Short-term treatment (2 days) with IL-1beta early in culture resulted in increased nodule number and size as well as calcium content in contrast to long-term treatment (6 days) in cultures assessed at 10-12 days. This increase in bone formation was blocked by IL-1 receptor antagonists. Short-term treatment increased COX-2, prostaglandin (PGE(2)), and iNOS production. Exogenous PGE(2) with IL-1beta enhanced this effect. COX-2 inhibitors, indomethacin and N-39, blocked 50% of nodule formation. NO donor did not modify effects of IL-1beta, but iNOS inhibitor (1400W) partially blocked the effects. However, PGE(2) and NO donors could not rescue the decreased nodule number resulting from long-term IL-1beta treatment. The results of this study suggest a biphasic effect of IL-1beta on bone nodule formation activated by IL-1beta binding with IL-1 receptors, and the anabolic effect of early short-term treatment with IL-1beta is likely mediated by PGE without ruling out nitric oxide.