BACKGROUND: Mesenchymal stem cells (MSCs) are a pluripotent cell type that can differentiate into adipocytes, osteoblasts and other cells. The reciprocal relationship between adipogenesis and osteogenesis was previously demonstrated; however, the mechanisms remain largely unknown. METHODS AND FINDINGS: We report that activation of PKA by 3-isobutyl-1 methyl xanthine (IBMX) and forskolin enhances adipogenesis, the gene expression of PPARgamma2 and LPL, and downregulates the gene expression of Runx2 and osteopontin, markers of osteogenesis. PKA activation also decreases the ratio of Receptor Activator of the NF-kappaB Ligand to Osteoprotegerin (RANKL/OPG) gene expression - the key factors of osteoclastogenesis. All these effects are mediated by the cAMP/PKA/CREB pathway by suppressing leptin, and may contribute to PKA stimulators-induced in vivo bone loss in developing zebrafish. CONCLUSIONS: Using MSCs, the center of a newly proposed bone metabolic unit, we identified cAMP/PKA signaling, one of the many signaling pathways that regulate bone homeostasis via controlling cyto-differentiation of MSCs and altering RANKL/OPG gene expression.