Osteoblasts and adipocytes differentiate from common pleiotropic mesenchymal stem cells under transcriptional controls by numerous factors and multiple intracellular signalings. However, cellular signaling factors that determine cell fates of mensenchymal stem cells in bone marrow remain to be largely uncovered, though peroxisome proliferator-activated receptor-gamma (PPAR-gamma) is well established as a prime inducer of adipogenesis. Here, we describe two signaling pathways that induce the cell fate decision into osteoblasts from adipocytes. One signaling is a TAK1/TAB1/NIK cascade activated by TNF-alpha and IL-1, and the activated NF-kappaB blocked the DNA binding of PPAR-gamma, attenuating the activated PPAR-mediated adipogenesis. The second signaling is the noncanonical Wnt pathway through CaMKII-TAK1/TAB2-NLK. Activated NLK by a noncanonical Wnt ligand (Wnt-5a) transrepresses PPAR transactivation through a histone methyltransferase, SETDB1. Wnt-5a induces phosphorylation of NLK, leading to the formation of a corepressor complex that inactivates PPAR function through histone H3-K9 methylation. Thus, two signaling pathways lead to an osteoblastic cell lineage decision from mesenchymal stem cells through two distinct modes of PPAR transrepression.