Long noncoding RNAs (lncRNAs) have been demonstrated to be important regulators during the osteogenic differentiation of mesenchymal stem cells (MSCs). We analyzed the lncRNA expression profile during osteogenic differentiation of human umbilical cord-derived mesenchymal stem cells (hUC-MSCs) and identified a significantly downregulated lncRNA RP11-527N22.2, named osteogenic differentiation inhibitory lncRNA 1, ODIR1. In hUC-MSCs, ODIR1 knockdown significantly promoted osteogenic differentiation, whereas overexpression inhibited osteogenic differentiation in vitro and in vivo. Mechanistically, ODIR1 interacts with F-box protein 25 (FBXO25) and facilitates the proteasome-dependent degradation of FBXO25 by recruiting Cullin 3 (CUL3). FBXO25 increases the mono-ubiquitination of H2BK120 (H2BK120ub) which subsequently promotes the trimethylation of H3K4 (H3K4me3). Both H2BK120ub and H3K4me3 form a loose chromatin structure, inducing the transcription of the key transcription factor osterix (OSX) and increasing the expression of the downstream osteoblast markers, osteocalcin (OCN), osteopontin (OPN), and alkaline phosphatase (ALP). In summary, ODIR1 acts as a key negative regulator during the osteogenic differentiation of hUC-MSCs through the FBXO25/H2BK120ub/H3K4me3/OSX axis, which may provide a novel understanding of lncRNAs that regulate the osteogenesis of MSCs and a potential therapeutic strategy for the regeneration of bone defects.