Calcineurin-nuclear factor of activated T cells signaling controls the differentiation and function of osteoclasts and osteoblasts, and regulator of calcineurin-2 (Rcan2) is a physiological inhibitor of this pathway. Rcan2 expression is regulated by T(3), which also has a central role in skeletal development and bone turnover. To investigate the role of Rcan2 in bone development and maintenance, we characterized Rcan2(-/-) mice and determined its skeletal expression in T(3) receptor (TR) knockout and thyroid-manipulated mice. Rcan2(-)(/)(-) mice had normal linear growth but displayed delayed intramembranous ossification, impaired cortical bone formation, and reduced bone mineral accrual during development as well as increased mineralization of adult bone. These abnormalities resulted from an isolated defect in osteoblast function and are similar to skeletal phenotypes of mice lacking the type 2 deiodinase thyroid hormone activating enzyme or with dominant-negative mutations of TRα, the predominant TR isoform in bone. Rcan2 mRNA was expressed in primary osteoclasts and osteoblasts, and its expression in bone was differentially regulated in TRα and TRβ knockout and thyroid-manipulated mice. However, in primary osteoblast cultures, T(3) treatment did not affect Rcan2 mRNA expression or nuclear factor of activated T cells c1 expression and phosphorylation. Overall, these studies establish that Rcan2 regulates osteoblast function and its expression in bone is regulated by thyroid status in vivo.