Binding of N-formyl-methionyl-leucyl-phenylalanine (fMLP) to its specific cell surface receptor, N-formyl peptide receptor (FPR), triggers different cascades of biochemical events, eventually leading to cellular activation. However, the physiological role of fMLP and FPR during differentiation of mesenchymal stem cells is unknown. In this study, we attempted to determine whether fMLP regulates differentiation of mesenchymal stem cells derived from bone marrow. Analysis by quantitative-PCR and flow cytometry showed significantly increased expression of FPR1, but not FPR2 and FPR3, during osteoblastic differentiation. fMLP, a specific ligand of FPR1, promotes osteoblastic commitment and suppresses adipogenic commitment under differentiation conditions. Remarkably, fMLP-stimulated osteogenesis is associated with increased expression of osteogenic markers and mineralization, which were blocked by cyclosporine H, a selective FPR1 antagonist. In addition, fMLP inhibited expression of peroxisome proliferator-activated receptor-␥1, a major regulator of adipocytic differentiation. fMLP-stimulated osteogenic differentiation was mediated via FPR1-phospholipase C/phospholipase D-Ca 2؉ -calmodulin-dependent kinase II-ERK-CREB signaling pathways. Finally, fMLP promoted bone formation in zebrafish and rabbits, suggesting its physiological relevance in vivo. Collectively, our findings provide novel insight into the functional role of fMLP in bone biology, with important implications for its potential use as a therapeutic agent for treatment of bone-related disorders.