Bone-marrow adipogenesis is an aging-related phenomenon and is correlated with osteoporosis. The latter is a prevalent bone disease in the elderly leading to increased fracture risk and mortality. It is widely hypothesized that the underlying molecular mechanism includes a shift in the commitment of mesenchymal stem cells (MSCs) from the osteogenic lineage to the adipogenic lineage. Lineage skewing is at least partially a result of transcriptional changes. The nuclear transcription factor peroxisome proliferator-activated receptor gamma (PPAR-gamma) has been proposed as a major decision factor in MSC lineage commitment, promoting adipogenesis at the expense of osteogenesis. Here we found that PPAR-gamma acted unexpectedly to stimulate osteoblast differentiation from human bone marrow-derived MSCs. Both rosiglitazone-mediated activation and overexpression of PPAR-gamma caused acceleration of osteoblast differentiation. Conversely, shRNAi-mediated PPAR-gamma knockdown diminished osteoblast differentiation. MSCs that were treated with rosiglitazone did not preferentially differentiate into adipocytes. However, the rosiglitazone-mediated acceleration of osteoblast differentiation was followed by increased accumulation of reactive oxygen species and apoptosis. In contrast to the osteogenic lineage, cells of the adipogenic lineage were protected from this. Our data support a new concept on bone health that adds to the explanation of the clinically observed suppressive action of activated PPAR-gamma on bone and the associated phenomenon of bone marrow adipogenesis. This concept is based on a higher susceptibility of the osteogenic than the adipogenic lineage to oxidative stress and apoptosis that is preferentially triggered in the osteoblasts by activated PPAR-gamma.