Osteogenic differentiation of human mesenchymal stem cells (hMSCs) is classically thought to be mediated by different cytokines such as the bone morphogenetic proteins (BMPs). Here, we report that cell adhesion to extracellular matrix (ECM), and its effects on cell shape and cytoskeletal mechanics, regulates BMP-induced signaling and osteogenic differentiation of hMSCs. Using micropatterned substrates to progressively restrict cell spreading and flattening against ECM, we demonstrated that BMP-induced osteogenesis is progressively antagonized with decreased cell spreading. BMP triggered rapid and sustained RhoA/Rho-associated protein kinase (ROCK) activity and contractile tension only in spread cells, and this signaling was required for BMP-induced osteogenesis. Exploring the molecular basis for this effect, we found that restricting cell spreading, reducing ROCK signaling, or inhibiting cytoskeletal tension prevented BMP-induced SMA/mothers against decapentaplegic (SMAD)1 c-terminal phosphorylation, SMAD1 dimerization with SMAD4, and SMAD1 translocation into the nucleus. Together, these findings demonstrate the direct involvement of cell spreading and RhoA/ROCK-mediated cytoskeletal tension generation in BMP-induced signaling and early stages of in vitro osteogenesis, and highlight the essential interplay between biochemical and mechanical cues in stem cell differentiation.