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Bone formation requires synthesis, secretion, and mineralization of matrix. Deficiencies in these processes produce bone defects. The absence of the PDZ domain protein Na+/H+ exchange regulatory factor 1 (NHERF1) in mice, or its mutation in humans, causes osteomalacia believed to reflect renal phosphate wasting. We show that NHERF1 is expressed by mineralizing osteoblasts and organizes Na+/H+ exchangers (NHEs) and the PTH receptor. NHERF1-null mice display reduced bone formation and wide mineralizing fronts despite elimination of phosphate wasting by dietary supplementation. Bone mass was normal, reflecting coordinated reduction of bone resorption and formation. NHERF1-null bone had decreased strength, consistent with compromised matrix quality. Mesenchymal stem cells from NHERF1-null mice showed limited osteoblast differentiation but enhanced adipocyte differentiation. PTH signaling and Na+/H+ exchange were dysregulated in these cells. Osteoclast differentiation from monocytes was unaffected. Thus, NHERF1 is required for normal osteoblast differentiation and matrix synthesis. In its absence, compensatory mechanisms maintain bone mass, but bone strength is reduced. [ABSTRACT FROM AUTHOR]