Mesenchymal stem cell (MSC) has drawn much attention in the aspect of tissue renewal and wound healing because of its multipotency. We initially observed that bone marrow-derived human MSCs (hMSCs) divided poorly and took flat and enlarged morphology after expanded in culture over a certain number of cell passage, which resembled characteristic features of senescent cells, well-studied in human diploid fibroblasts (HDFs). More interestingly, adipogenic differentiation potential of hMSCs sharply declined as they approached the end of their proliferative life span. In this study, altered hMSCs were verified to be senescent by their senescence-associated beta-galactosidase (SA-beta-gal) activity and the increased expression of cell cycle regulating proteins (p16(INK4a), p21(Waf1) and p53). Similar as in HDFs, basal phosphorylation level of ERK was also significantly increased in senescent hMSCs, implying altered signal paths commonly shared by the senescent cells. Insulin, a major component of adipogenesis inducing medium, did not phosphorylate ERK 1/2 more in senescent hMSCs after its addition whereas it did in young cells. In senescent hMSCs, we also found a significant increase of caveolin-1 expression, previously reported as a cause for the attenuated response to growth factors in senescent HDFs. When we overexpressed caveolin-1 in young hMSC, not only insulin signaling but also adipogenic differentiation was significantly suppressed with down-regulated PPARgamma2. These data indicate that loss of adipogenic differentiation potential in senescent hMSC is mediated by the over-expression of caveolin-1.