We report that oxytocin (Oxt) receptors (Oxtrs), on stimulation by the ligand Oxt, translocate into the nucleus of osteoblasts, implicating this process in the action of Oxt on osteoblast maturation. Sequential immunocytochemistry of intact cells or isolated nucleoplasts stripped of the outer nuclear membrane showed progressive nuclear localization of the Oxtr; this nuclear translocation was confirmed by monitoring the movement of Oxtr–EGFP as well as by immunogold labeling. Nuclear Oxtr localization was conclusively shown by Western immunoblotting and MS of nuclear lysate proteins. We found that the passage of Oxtrs into the nucleus was facilitated by successive interactions with β-arrestins (Arrbs), the small GTPase Rab5, importin-β (Kpnb1), and transportin-1 (Tnpo1). siRNA-mediated knockdown of Arrb1, Arrb2, or Tnpo1 abrogated Oxt-induced expression of the osteoblast differentiation genes osterix (Sp7), Atf4, bone sialoprotein (Ibsp), and osteocalcin (Bglap) without affecting Erk phosphorylation. Likewise and again, without affecting pErk, inhibiting Arrb recruitment by mutating Ser rich clusters of the nuclear localization signal to Ala abolished nuclear import and Oxtr-induced gene expression. These studies define a previously unidentified mechanism for Oxtr action on bone and open possibilities for direct transcriptional modulation by nuclear G protein-coupled receptors.