Other than its known effects on the cardiovascular system, angiotensin II (Ang II) stimulates cell growth in several cell types. In this study, we examined whether it also might affect bone cell metabolism. Ang II stimulated DNA and collagen synthesis and decreased alkaline phosphatase (AP) activity in bone cell populations derived from the periosteum of fetal rat calvariae. Similar effects of Ang II were observed on human adult bone cells obtained by collagenase digestion from trabecular bone. Clonal cell analysis, autoradiographic studies, and receptor subtype analysis suggested the presence of specific Ang II receptor subtype 1 (AT1) binding sites on AP+ osteoblastic precursor cells. Ang II had no direct effects on osteoblastic cells with a mature phenotype, but paracrine effects of Ang II on mature osteoblasts could be observed upon coculture with Ang II-responsive bone cell populations. Because Ang II is known to be locally generated by endothelial cells, Ang II might play an important role in coordinating capillary cell growth and osteoblastic bone formation during bone remodeling.