Osteoblast maturation is a multistep series of events characterized by an integrated cascade of gene expression that are accompanied by specific phenotypic alterations. To find new osteoblast-related genes we cloned differentially expressed cDNAs characteristic of specific differentiation stages in the mouse osteoblast-like MC3T3-E1 cells by a differential display method. We identified a novel cDNA encoding a putative glycerophosphodiester phosphodiesterase, GDE3, which specifically was expressed at the stage of matrix maturation. Interestingly, the deduced amino acid sequence contains 539 amino acids including seven putative transmembrane domains and a glycerophosphodiester phosphodiesterase region in one of the extracellular loops. Northern blot analysis revealed that GDE3 was also expressed in spleen as well as primary calvarial osteoblasts and femur. We next transfected HEK293T cells with GDE3 with green fluorescent protein fused to the C terminus. The green fluorescent protein-fused protein accumulated at the cell periphery, and the transfected cells overexpressing the protein changed from a spread form to rounded form with disappearance of actin filaments. Immunofluorescence staining with GDE3 antibody and phalloidin in MC3T3-E1 cells indicated that endogenous GDE3 might be co-localized with the actin cytoskeleton. To identify a role for GDE3 in osteoblast differentiation, MC3T3-E1 cells stably expressing the full-length protein were constructed. Expression of GDE3 showed morphological changes, resulting in dramatic increases in alkaline phosphatase activity and calcium deposit. These results suggest that GDE3 might be a novel seven-transmembrane protein with a GP-PDE-like extracellular motif expressed during the osteoblast differentiation that dramatically accelerates the program of osteoblast differentiation and is involved in the morphological change of cells.