Human mesenchymal stem cells (hMSCs) from bone marrow are regarded as putative osteoblast progenitors in vivo and differentiate into osteoblasts in vitro. Positive signaling by the canonical wingless (Wnt) pathway is critical for the differentiation of MSCs into osteoblasts. In contrast, activation of the peroxisome proliferator-activated receptor-gamma (PPARgamma)-mediated pathway results in adipogenesis. We therefore compared the effect of glycogen-synthetase-kinase-3beta (GSK3beta) inhibitors and PPARgamma inhibitors on osteogenesis by hMSCs. Both compounds altered the intracellular distribution of beta-catenin and GSK3beta in a manner consistent with activation of Wnt signaling. With osteogenic supplements, the GSK3beta inhibitor 6-bromo-indirubin-3'-oxime (BIO) and the PPARgamma inhibitor GW9662 (GW) enhanced early osteogenic markers, alkaline phosphatase (ALP), and osteoprotegerin (OPG) by hMSCs and transcriptome analysis demonstrated up-regulation of genes encoding bone-related structural proteins. At higher doses of the inhibitors, ALP levels were attenuated, but dexamethasone-induced biomineralization was accelerated. When hMSCs were pretreated with BIO or GW and implanted into experimentally induced nonself healing calvarial defects, GW treatment substantially increased the capacity of the cells to repair the bone lesion, whereas BIO treatment had no significant effect. Further investigation indicated that unlike GW, BIO induced cell cycle inhibition in vitro. Furthermore, we found that GW treatment significantly reduced expression of chemokines that may exacerbate neutrophil- and macrophage-mediated cell rejection. These data suggest that use of PPARgamma inhibitors during the preparation of hMSCs may enhance the capacity of the cells for osteogenic cytotherapy, whereas adenine analogs such as BIO can adversely affect the viability of hMSC preparations in vitro and in vivo.