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Icariine is a flavonoid isolated from a traditional Chinese medicine Epimedium pubescens and is the main active compound of it. Recently, Epimedium pubescens was found to have a therapeutic effect on osteoporosis. But the mechanism is unclear. The aim of the study was to research the effect of Icariine on the proliferation and differentiation of human osteoblasts.Human osteoblasts were obtained by inducing human marrow mesenchymal stem cells (hMSCs) directionally and were cultured in the presence of various concentrations of Icariine. 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide (MTT) test was used to observe the effect of Icariine on cell proliferation. The activity of alkaline phosphatase (ALP) and the amount of calcified nodules were assayed to observe the effect on cell differentiation. The expression of bone morphogenetic protein 2 (BMP-2) mRNA was detected by reverse transcriptase-polymerase chain reaction (RT-PCR).Icariine (20 μg/ml) increased significantly the proliferation of human osteoblasts. And, Icariine (10 μg/ml and 20 μg/ml) increased the activity of ALP and the amount of calcified nodules of human osteoblasts significantly (P<0.05). BMP-2 mRNA synthesis was elevated significantly in response to Icariine (20 μg/ml).Icariine has a direct stimulatory effect on the proliferation and differentiation of cultured human osteoblast cells in vitro, which may be mediated by increasing production of BMP-2 in osteoblasts.