Elucidating the molecular mechanisms that regulate human stromal (mesenchymal) stem cell (hMSC) differentiation into osteogenic lineage is important for the development of anabolic therapies for treatment of osteoporosis. MicroRNAs (miRNAs) are short, noncoding RNAs that act as key regulators of diverse biological processes by mediating translational repression or mRNA degradation of their target genes. Here, we show that miRNA-138 (miR-138) modulates osteogenic differentiation of hMSCs. miRNA array profiling and further validation by quantitative RT-PCR (qRT-PCR) revealed that miR-138 was down-regulated during osteoblast differentiation of hMSCs. Overexpression of miR-138 inhibited osteoblast differentiation of hMSCs in vitro, whereas inhibition of miR-138 function by antimiR-138 promoted expression of osteoblast-specific genes, alkaline phosphatase (ALP) activity, and matrix mineralization. Furthermore, overexpression of miR-138 reduced ectopic bone formation in vivo by 85%, and conversely, in vivo bone formation was enhanced by 60% when miR-138 was antagonized. Target prediction analysis and experimental validation by luciferase 3' UTR reporter assay confirmed focal adhesion kinase, a kinase playing a central role in promoting osteoblast differentiation, as a bona fide target of miR-138. We show that miR-138 attenuates bone formation in vivo, at least in part by inhibiting the focal adhesion kinase signaling pathway. Our findings suggest that pharmacological inhibition of miR-138 by antimiR-138 could represent a therapeutic strategy for enhancing bone formation in vivo.