Myostatin (GDF8) is a negative regulator of skeletal muscle growth and mice lacking myostatin show a significant increase in muscle mass and bone density compared to normal mice. In order to further define the role of myostatin in regulating bone mass we sought to determine if loss of myostatin function significantly altered the potential for osteogenic differentiation in bone marrow-derived mesenchymal stem cells in vitro and in vivo. We first examined expression of the myostatin receptor, the type IIB activin receptor (AcvrIIB), in bone marrow-derived mesenchymal stem cells (BMSCs) isolated from mouse long bones. This receptor was found to be expressed at high levels in BMSCs, and we were also able to detect AcvrIIB protein in BMSCs in situ using immunofluorescence. BMSCs isolated from myostatin-deficient mice showed increased osteogenic differentiation compared to wild-type mice; however, treatment of BMSCs from myostatin-deficient mice with recombinant myostatin did not attenuate the osteogenic differentiation of these cells. Loading of BMSCs in vitro increased the expression of osteogenic factors such as BMP-2 and IGF-1, but treatment of BMSCs with recombinant myostatin was found to decrease the expression of these factors. We investigated the effects of myostatin loss-of-function on the differentiation of BMSCs in vivo using hindlimb unloading (7-day tail suspension). Unloading caused a greater increase in marrow adipocyte number, and a greater decrease in osteoblast number, in myostatin-deficient mice than in normal mice. These data suggest that the increased osteogenic differentiation of BMSCs from mice lacking myostatin is load-dependent, and that myostatin may alter the mechanosensitivity of BMSCs by suppressing the expression of osteogenic factors during mechanical stimulation. Furthermore, although myostatin deficiency increases muscle mass and bone strength, it does not prevent muscle and bone catabolism with unloading.