Stanniocalcin 1 (STC1) is a calcium- and phosphate-regulating hormone that is expressed in all tissues, including bone tissues, and is involved in calcium and phosphate homeostasis. Previously, STC1 expression was found to be increased by 1,25-dihydroxyvitamin D₃ [1,25(OH)₂D₃] administration in renal proximal tubular cells. In this study, we investigated whether STC1 directly regulates osteoblast differentiation or reciprocally controls the effects of 1,25(OH)₂D₃ on osteoblasts to contribute to bone homeostasis. We found that STC1 inhibited osteoblast differentiation in vitro and bone morphogenetic protein 2 (BMP2)-induced ectopic bone formation in vivo. Moreover, 1,25(OH)₂D₃ increased STC1 expression through direct binding to the Stc1 promoter of the vitamin D receptor (VDR). STC1 activated the 1,25(OH)₂D₃-VDR signaling pathway through the upregulation of VDR expression mediated by the inhibition of Akt phosphorylation in osteoblasts. STC1 further increased the effects of 1,25(OH)₂D₃ on receptor activator of nuclear factor-κB ligand (RANKL) secretion and inhibited osteoblast differentiation by exhibiting a positive correlation with 1,25(OH)₂D₃. The long-bone phenotype of transgenic mice overexpressing STC1 specifically in osteoblasts was not significantly different from that of wild-type mice. However, compared with that in the wild-type mice, 1,25(OH)₂D₃ administration significantly decreased bone mass in the STC1 transgenic mice. Collectively, these results suggest that STC1 negatively regulates osteoblast differentiation and bone formation; however, the inhibitory effect of STC1 on osteoblasts is transient and can be reversed under normal conditions. Nevertheless, the synergistic effect of STC1 and 1,25(OH)₂D₃ through 1,25(OH)₂D₃ administration may reduce bone mass by inhibiting osteoblast differentiation.