Metformin is widely used for the treatment of type 2 diabetes mellitus. In this study, we evaluated the effects of metformin on the osteoblast and adipocyte differentiation of rat marrow mesenchymal stem cells (MSCs) in culture. Treatment of MSCs in osteoblastic or adipogenic medium with 100 m metformin for 21 days led to an increased mRNA expression of the osteoblast markers but a decreased m RNA expression of the adipocyte markers in the MSCs. Metformin markedly stimulated deposition of mineralized nodules and blocked the formation of cytoplasmic lipid droplets. In addition, alkaline phosphate activity and Western blot analysis for core binding factor a1 (Cbfa1) and peroxisome proliferator-activated receptor gamma 2 (PPARγ2) proteins also confirmed that metformin inhibited adipocyte differentiation and promoted osteoblast differentiation. The reciprocal relationship between osteoblastic and adipogenic differentiation suggests that metformin may regulate osteoblastic and adipogenic differentiation through inhibition of PPARγ.