Regeneration, tissue remodeling, and organ repair after injury, which rely on the regulated activity of tissue-borne stem cells, become increasingly compromised with advancing age. Mesenchymal stroma cells were isolated from bone of differently aged healthy donors. The rare population of mesenchymal stem cells (MSCs) contained in the primary cell isolates barely declined in number, yet the stem cells displayed diminished long-term proliferation potential relative to the donor age and the expression of vascular cell adhesion molecule-1 (VCAM-1; CD106) was elevated on primary MSCs. In CD106(bright) MSCs, the abundance of a panel of stemness transcription factors remained unchanged. Because the CD106 level could be further enhanced by proinflammatory cytokines, we considered the rate of VCAM-1 expression to be a good reflection of an endogenous inflammatory milieu to which the MSCs are exposed. Treatment of MSCs with increasing doses of interferon-γ exerted no immediate influence on their self-renewal capacity. However, it impacted on the differentiation potential toward the adipogenic or osteogenic lineage. Moderately elevated levels of inflammatory stimuli supported osteoblastogenesis whereas the same treatment reduced adipogenic differentiation in MSCs from young and intermediately aged donors. In MSCs from elderly donors, however, osteoblastogenesis was greatly diminished in an inflammatory environment whereas adipogenic differentiation remained unchanged. Conclusively, moderate levels of inflammatory stimuli are being interpreted by MSCs at a young age as instructive signals for osteoblastogenesis, whereas at old age, an inflammatory milieu may effectively suppress bone remodeling and repair by tissue-borne MSCs while uninterrupted adipogenic differentiation may lead to adipose upgrowth.