A 4 base-pair deletion mutation in the Distal-less 3 (DLX3) gene is etiologic for Tricho-Dento-Osseous syndrome (TDO). A cardinal feature of TDO is an increased thickness and density of bone. We tested the effects of the DLX3 gene mutation responsible for TDO on the osteoblastic differentiation of preosteoblastic MC3T3E1 cells and multipontent mesenchymal C2C12 cells. Differential expression analysis of C2C12 cells transfected with wild type DLX3 or mutant DLX3 was performed and desmin gene expression, an early myoblastic differentiation marker in mesenchymal cells, was evaluated by RT-PCR, western blot analysis, and desmin promoter transcriptional activity. Transfection of wild type DLX3 into MC3T3E1 and C2C12 cells increased alkaline phosphatase-2 activity, mineral deposition, and promoter activities of the osteocalcin and type 1 collagen genes compared to empty vector transfected cells. Transfection of mutant DLX3 into these cells further enhanced alkaline phosphatase activity, mineral deposition, and osteocalcin promoter activities, but did not further enhance type 1 collagen promoter activity. Transfection of mutant DLX3 into C2C12 cells markedly down regulated desmin gene expression, and protein expression of desmin and MyoD, while increasing protein expression of osterix and Runx2. These results demonstrate that the DLX3 deletion mutation associated with TDO enhances mesenchymal cell differentiation to an osteoblastic lineage rather than a myoblastic lineage by changing the fate of mesenchymal cells. This DLX3 mutation also accelerates the differentiation of osteoprogenitor cells to osteoblasts at later stages of osteogenesis.