Background. Osteonecrosis of the femoral head (ONFH) is a common hip joint disease, which is more harmful and seriously affects the lives of patients. This study aims to clarify the regulatory mechanism of lncRNA FGD5-AS1 in ONFH. Methods. The expression of the protein and mRNA was detected by RT-qPCR and Western blot assay. The regulatory mechanism of lncRNA FGD5-AS1 was detected by the dual-luciferase reporter assay, CCK-8 assay, and flow cytometry assay. Results. Dex can inhibit cell proliferation and differentiation and induce apoptosis in hBMSCs in a dose-dependent manner. Overexpression of lncRNA FGD5-AS1 promoted cell proliferation and restrained apoptosis in Dex-treated hBMSCs. In addition, lncRNA FGD5-AS1 acts as a sponge for miR-296-5p. Also, miR-296-5p directly targets STAT3. More importantly, miR-296-5p and STAT3 can affect the function of lncRNA FGD5-AS1 in Dex-treated hBMSCs. Conclusion. lncRNA FGD5-AS1 promotes cell proliferation and inhibits apoptosis in steroid-induced ONFH through acting as a sponge for miR-296-5p and upregulation of STAT3.