To examine the role of lipid metabolism in the growth and function of osteoblast‐like cells, we studied ROS 17/2.8 osteosarcoma cells and primary cultures of rat calvarial osteoblasts during growth in a serum‐free medium supplemented by purified human lipoproteins or by liposomes. Increase in ROS cell number was measured in sparse (1–5 × 10³/cm²) cultures over 6–8 days. Liposomes (0–300 μg/ml) and high (HDL), low (LDL), and very low density (VLDL) lipoprotein fractions (0–300 μg apoprotein) markedly stimulated cell growth. Cells plated at 5 × 10³/cm² achieved growth rates in the presence of LDL or HDL comparable to 10% fetal bovine serum. Serum‐free culture with exogenous lipid maintained the response of cell cyclic AMP accumulation to parathyroid hormone. Cyclic AMP response to parathyroid hormone was enhanced by glucocorticosteroid, and was attenuated by 1,25‐dihydroxyvitamin D (1,25(OH)₂D) with an EC₅₀ (10⁻¹⁰ M) comparable to that previously observed in serum‐cultured cells (J. Biol. Chem. 258:736, 1985). 1,25(OH)₂D also increased the alkaline phosphatase activity in ROS cells cultured in lipid‐supplemented serum‐free culture. Lipoproteins or liposomes also markedly enhanced the proliferative response of sparse cultures of normal rat osteoblasts to polypeptide mitogens.