A number of clinical studies have highlighted the importance of estrogen in bone growth and maintenance in men and postmenopausal women. In these instances, estrogen is synthesized locally within bone tissue by aromatase, encoded by the CYP19 gene. The mechanisms regulating aromatase expression in bone, however, are unclear. In this work we characterized the expression of aromatase activity and gene transcripts in the human fetal osteoblastic cell line, SV-HFO. Aromatase activity and gene transcript expression were stimulated by dexamethasone. Oncostatin M strongly stimulated aromatase expression in synergy with dexamethasone. These factors induced CYP19 transcripts that included the sequence of exon 1.4 in their 5′UTR. Consistent with this, a reporter construct harboring the genomic sequence of the promoter region of exon 1.4 (promoter 1.4) was also activated by dexamethasone and oncostatin M. 5′ deletion and mutation analysis revealed important roles for a glucocorticoid response element, an interferon γ activating sequence and a putative binding site for Sp1. Transfection of exogenous glucocorticoid receptor, STAT3 or Sp1 increased promoter activity, indicating a potential role for these transcription factors in regulating aromatase expression in SV-HFO cells. These data suggest that the SV-HFO cell line is a valuable model with which to elucidate the mechanisms regulating local estrogen synthesis in osteoblasts.