In a previous work, we demonstrated that the osteoprogenitors derived from the marrow stroma of the hypophysectomized (HX) rat demonstrate enhanced proliferative and differentiation capacities when placed in an optimal microenvironment. In this study, we sought to investigate the potential of the trabecular osteoblast-like cells of the HX rat. These cells represent a more mature pool of osteoblasts than the progenitors derived from the marrow stroma. We examined all three stages of osteoblast development using trabecular osteoblast-like cells derived from age-matched intact rats as a control. Using thymidine incorporation and cell number as indicators of proliferation, we found that these cells, like the osteoprogenitors derived from the HX rat, demonstrate augmented proliferation when placed in culture. Additionally, type I collagen expression remained at significant levels past the end stages of proliferation, at which point it is expected to be downregulated. Matrix maturation markers, such as alkaline phosphatase activity and bone sialoprotein expression, however, were significantly lower than in the controls. Mineralization potential, as measured by mineralized nodule formation, Ca²⁺ content, and OPN and OCN expression, was also significantly reduced. Our results have uncovered an aberrant model of osteoblast development in which proliferation is deregulated, resulting in a minimal capacity of these cells to develop into fully differentiated mineralizing osteoblasts.