Long-term treatment with glucocorticoid leads to the development of osteoporosis and osteonecrosis. In contrast to the marked inhibitory effect of pharmacological doses of glucocorticoids on bone formation, the relationship between physiological concentrations of glucocorticoids and osteoprogenitor cell proliferation and phenotypes has not been elucidated yet. In addition, the effects of dexamethasone treatment on the proliferation and osteoblastic differentiation of osteoprogenitor cells are also controversial. The purpose of this study was to examine the effects of dexamethasone on the proliferation and osteoblastic differentiation of periosteal-derived cells. Periosteal-derived cells were obtained from mandibular periosteums and introduced into the cell culture. After passage 3, the cells were further cultured for 21 days in the osteogenic induction medium with different dexamethasone concentrations of 0, 10, and 100 nM. The proliferation and osteoblastic phenotypes of periosteal-derived cells were promoted in dexamethasone-treated cells than in untreated cells. Among the dexamethasone-treated cells, cell proliferation was slightly greater in 10 nM dexamethasone-treated cells than in 100 nM dexamethasone-treated cells. Histochemical staining and the bioactivity of alkaline phosphatase (ALP) were higher in 100 nM dexamethasone-treated cells than in 10 nM dexamethasone-treated cells. Similarly, von Kossa-positive mineralization nodules and calcium content were also more evident in 100 nM dexamethasone-treated cells than in 10 nM dexamethasone-treated cells. These results suggest that dexamethasone enhances the in vitro osteoblastic differentiation of periosteal-derived cells. The present study also demonstrates that higher dexamethasone concentrations reduce the in vitro proliferation of periosteal-derived cells.