Osteogenic differentiation is critical to bone homeostasis, and its imbalance plays a key role in the progression of osteoporosis. Osteoblast cells are responsible for synthesizing new bone tissue, and understanding how to control osteoblastic differentiation is vital to the treatment of osteoporosis. Herein, we show that GPR173 signaling is involved in the regulation of osteoblastic differentiation in MC3T3-E1 cells. Our data reveals that GPR173 is abundantly expressed in MC3T3-E1 cells, and its expression is inducible upon the introduction of osteogenic media. The activation of GPR173 by its selective agonist phoenixin 20 induces the expression of several osteoblast signature genes including collagen type 1 alpha 1 (Col-I), osteocalcin (OCN), alkaline phosphatase (ALP) as well as increased matrix mineralization and ALP activity, suggesting that the activation of GPR173 promotes osteoblastic differentiation. Moreover, we show that the effect of phoenixin 20 is mediated by its induction on the key regulator runt-Related Transcription Factor 2 (Runx2). Mechanistically, we display that the action of phoenixin 20 requires the activation of MAPK kinase p38, and deactivation of p38 by its inhibitor SB203580 weakens the phoenixin 20-mediated induction of RUNX-2, ALP, and matrix mineralization. Silencing of GPR173 attenuates phoenixin 20-mediated osteoblastic differentiation, indicating its dependence on the receptor. Collectively, our study reveals a new role of GPR173 and its agonist phoenixin 20 in osteoblastic differentiation.