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The calcium-selective ion channel Orai1 has a complex role in bone homeostasis, with defects in both bone production and resorption detected in Orai1 germline knock-out mice. To determine whether Orai1 has a direct, cell-intrinsic role in osteoblast differentiation and function, we bred Orai1 flox/flox (Orai1fl/fl) mice with Runx2-cre mice to eliminate its expression in osteoprogenitor cells. Interestingly, Orai1 was expressed in a mosaic pattern in Orai1fl/fl-Runx2-cre bone. Specifically, antibody labeling for Orai1 in vertebral sections was uniform in wild type animals, but patchy regions in Orai1fl/fl-Runx2-cre bone revealed Orai1 loss while in other areas expression persisted. Nevertheless, by micro-CT, bones from Orai1fl/fl-Runx2-cre mice showed reduced bone mass overall, with impaired bone formation identified by dynamic histomorphometry. Cortical surfaces of Orai1fl/fl-Runx2-cre vertebrae however exhibited patchy defects. In cell culture, Orai1-negative osteoblasts showed profound reductions in store-operated Ca2+ entry, exhibited greatly decreased alkaline phosphatase activity, and had markedly impaired substrate mineralization. We conclude that defective bone formation observed in the absence of Orai1 reflects an intrinsic role for Orai1 in differentiating osteoblasts.