Prolactin is a pituitary hormone that increases with age. Hyperprolactinemia-induced bone loss occurs in humans and animals, and prolactin supports differentiation of preadipocyte cell lines in vitro. These studies describe the effects of prolactin on the differentiation of osteoblast-like cells derived from fetal rat calvaria cultured in fetal bovine serum or horse serum. Additional experiments tested the effect of prolactin treatment alone or in combination with troglitazone on the development of the osteoblast and adipocyte phenotypes. Phenotype development was assessed through quantification of mineralized bone nodules and adipocyte foci, and RT-PCR analysis of osteoblastic and adipogenic gene expression. Horse serum significantly suppressed these indices of osteoblast phenotype, (p < 0.05). However, prolactin treatment did not influence osteoblastogenesis or adipogenesis under the experimental conditions tested. The data suggest prolactin has no direct effect on osteoblast development; thus the mechanisms by which prolactin contributes to bone loss remain unclear.