Neuroendocrine peptide which is a critical regulator of cellular and organ growth, development, migration, differentiation and survival and of epithelial calcium ion transport. Regulates endochondral bone development and epithelial-mesenchymal interactions during the formation of the mammary glands and teeth. Required for skeletal homeostasis. Promotes mammary mesenchyme differentiation and bud outgrowth by modulating mesenchymal cell responsiveness to BMPs. Upregulates BMPR1A expression in the mammary mesenchyme and this increases the sensitivity of these cells to BMPs and allows them to respond to BMP4 in a paracrine and/or autocrine fashion. BMP4 signaling in the mesenchyme, in turn, triggers epithelial outgrowth and augments MSX2 expression, which causes the mammary mesenchyme to inhibit hair follicle formation within the nipple sheath (By similarity). Promotes colon cancer cell migration and invasion in an integrin alpha-6/beta-1-dependent manner through activation of Rac1.

Osteostatin is a potent inhibitor of osteoclastic bone resorption.