Fracture healing is closely related to the number and activity of bone marrow mesenchymal stem cells (BMSCs) near the fracture site. The present study was to investigate the effect of Rg1 on osteogenic differentiation of cultured BMSCs and related mechanisms and on the fracture healing in a fracture model. In vitro experiments showed that Rg1 promoted the proliferation and osteogenic differentiation of BMSCs. Western blot analyses demonstrated that Rg1 promoted osteogenic differentiation of BMSCs through the glucocorticoid receptor (GR)-dependent BMP-2/Smad signaling pathway. In vivo, X-ray examination showed that callus growth in rats treated with Rg1 was substantially faster than that in control rats after fracture. The results of H&E and Safranin-O/Fast Green staining revealed that, compared with controls, rats in the Rg1 treatment group had a significantly higher proportion of trabecular bone but a much lower proportion of fibers and cartilage components inside the callus. Micro-CT suggested that bone mineral density (BMD), percent bone volume (BV/TV), trabecular number (Tb.N), and trabecular thickness (Tb.Th) were significantly increased in the treatment group, whereas trabecular separation (Tb.Sp) was significantly reduced. Thus, Rg1 promotes osteogenic differentiation by activating the GR/BMP-2 signaling pathway, enhances bone calcification, and ultimately accelerates the fracture healing in rats.