Extracellular matrix plays an important role in regulating cell growth and differentiation. The biomimetic approach of cell‐based tissue engineering is based on mirroring this in vivo micro environment for developing a functional tissue engineered construct. In this study, we treated normal tissue culture plates with selected extracellular matrix components consisting of glycosaminoglycans such as chondroitin‐4‐sulphate, dermatan sulphate, chondroitin‐6‐sulphate, heparin and hyaluronic acid. Mesenchymal stem cells isolated from adult human bone marrow were cultured on the glycosaminoglycan treated culture plates to evaluate their regulatory role in cell growth and osteoblast differentiation. Although no significant improvement on human mesenchymal stem cell adhesion and proliferation was observed on the glycosaminoglycan‐treated tissue culture plates, there was selective osteoblast differentiation, indicating its potential role in differentiation rather than proliferation. Osteoblast differentiation studies showed high osteogenic potential for all tested glycosaminoglycans except chondroitin‐4‐sulphate. Osteoblast differentiation‐associated genes such as osterix, osteocalcin, integrin binding sialoprotein, osteonectin and collagen, type 1, alpha 1 showed significant upregulation. We identified osterix as the key transcription factor responsible for the enhanced bone matrix deposition observed on hyaluronic acid, heparin and chondroitin‐6‐sulphate. Hyaluronic acid provided the most favourable condition for osteoblast differentiation and bone matrix synthesis. Our results confirm and emphasise the significant role of extracellular matrix in regulating cell differentiation. To summarise, glycosaminoglycans of extracellular matrix played a significant role in regulating osteoblast differentiation and could be exploited in the biomimetic approach of fabricating or functionalizing scaffolds for stem cell based bone tissue engineering. Copyright © 2012 John Wiley & Sons, Ltd.