Recently, many natural medicines, which have advantage of less side effects and possibility of long-term use have been studied for their capacity of anti-bacterial, anti-inflammatory and regenerative potential of periodontal tissues. Olibanum has the effects to hemostasis, analgesic and anti-inflammatory, and it also has been traditionally used as a drug for the treatment of bone disease in oriental medicine. The purpose of the present study was to investigate the effects of Olibanum extracts on the activity and differentiation of MC3T3-E1 cells, alkaline phosphatase(ALP) synthesis, formation of bone nodules and expression of type I collagen of MC3T3-E1 cells. To examine the cellular activity, MC3T3-E1 cells were cultured with α-MEM(control) and each concentration of Olibanum for 2 days and 4 days. To compare the ALP synthesis, MC3T3-E1 cells were cultured with α MEM(negative control), dexamethasone(positive control), and each concentration of Olibanum for 2 days and 4 days. To compare the bone nodule formation, MC3T3-E1 cells were cultured for 21 days, and to compare the type I collagen expression, MC3T3-E1 cells were cultured for 4 days. The cellular activity of MC3T3-E1 cells treated with 1 µg/ml of Olibanum extracts was significantly increased at 4-day(p<0.05) to control. The activity of ALP in MC3T3-E1 cells treated with 1 µg/ml Olibanum extracts was significantly increased at 4-day(p<0.05). All the experimental groups showed much more bone nodule formation than control groups. The group treated with 1 µg/ml of Olibanum extracts was the highest bone nodule formation, and showed much more type I collagen expression than negative control.