Differentiation of human mesenchymal stem cells into osteoblasts is controlled by extracellular cues. Canonical Wnt signaling is particularly important for maintenance of bone mass in humans. Post-transcriptional regulation of gene expression, mediated by microRNAs, plays an essential role in the control of osteoblast differentiation. Here, we find that miR-29a is necessary for human osteoblast differentiation, and miR-29a is increased during differentiation in the mesenchymal precursor cell line hFOB1.19 and in primary cultures of human osteoblasts. Furthermore, the promoter of the expressed sequence tag containing the human miR-29a gene is induced by canonical Wnt signaling. This effect is mediated, at least in part, by two T-cell factor/LEF-binding sites within the proximal promoter. Furthermore, we show that the negative regulators of Wnt signaling, Dikkopf-1 (Dkk1), Kremen2, and secreted frizzled related protein 2 (sFRP2), are direct targets of miR-29a. Endogenous protein levels for these Wnt antagonists are increased in cells transfected with synthetic miR-29a inhibitor. In contrast, transfection with miR-29a mimic decreases expression of these antagonists and potentiates Wnt signaling. Overall, we demonstrate that miR-29 and Wnt signaling are involved in a regulatory circuit that can modulate osteoblast differentiation. Specifically, canonical Wnt signaling induces miR-29a transcription. The subsequent down-regulation of key Wnt signaling antagonists, Dkk1, Kremen2, and sFRP2, by miR-29a potentiates Wnt signaling, contributing to a gene expression program important for osteoblast differentiation. This novel regulatory circuit provides additional insight into how microRNAs interact with signaling molecules during osteoblast differentiation, allowing for fine-tuning of intricate cellular processes.