Osteoblasts and adipocytes differentiate from a common precursor, the pluripotent mesenchymal stem cell (MSC) found in bone marrow (BMSC) and adipose tissue (AD-MSC). Numerous transcription factors and multiple extracellular and intracellular signals regulating adipogenesis and osteoblastogenesis have been identified and analyzed. Significantly, inducers of differentiation towards one lineage may inhibit cell differentiation into an alternative lineage. For example, the canonical Wnt/beta-catenin pathway induces osteoblastogenesis and inhibits adipogenesis, whereas the peroxisome proliferator activated receptor-gamma (PPAR-gamma) is a prime inducer of adipogenesis and, as shown in recent studies, inhibits osteoblastogenesis. We have identified two signaling pathways that switch the cell fate decision from adipocytes to osteoblasts by suppressing the transactivation function of PPAR-gamma. In the first pathway, the TNF-alpha- or IL-1-induced TAK1/TAB1/NIK signaling cascade attenuates PPAR-gamma-mediated adipogenesis by inhibiting the binding of PPAR-gamma to the DNA response element. The second is the noncanonical Wnt pathway through the CaMKII-TAK1/TAB2-NLK (nemo-like kinase) signaling cascade. Specifically, Wnt-5a-induced phosphorylation of NLK triggers formation of a complex with the histone methyltransferase SETDB1 (SET domain, bifurcated 1) that represses PPAR-gamma transactivation through histone H3-K9 methylation at the target genes. Thus, two signaling cascades promote osteoblastic differentiation from MSC through two distinct modes of PPAR-gamma transrepression.