Deletion of smpd3 induces osteogenesis and dentinogenesis imperfecta in mice. smpd3 is highly elevated in the parietal bones of developing mouse calvaria, but not in sutural mesenchymes. Here, we examine the mechanism of smpd3 regulation, which involves BMP2 stimulation of Runx2. smpd3 mRNA expression increased in response to BMP2 treatment and Runx2 transfection in C2C12 cells. The Runx2-responsive element (RRE) encoded within the -562 to -557 region is important for activation of the smpd3 promoter by Runx2. Electrophoretic mobility shift assays revealed that Runx2 binds strongly to the -355 to -350 RRE and less strongly to the -562 to -557 site. Thus, the smpd3 promoter is activated by BMP2 and is directly regulated by the Runx2 transcription factor. This novel description of smpd3 regulation will aid further studies of bone development and osteogenesis.