Tumor necrosis factor-alpha (TNF-α) is one major inflammatory factor peaking at 24 h after bone fracture in response to injury; its role in bone healing is controversial. The aims of this study were to investigate whether the duration of exposure to TNF-α is crucial for the initiation of bone regeneration and to determine its underlying mechanism(s). We demonstrated that 24 h of TNF-α treatment significantly abrogated osteocalcin gene expression by human primary osteoblasts (HOBs). However, when TNF-α was withdrawn after 24 h, bone sialoprotein and osteocalcin gene expression levels in HOBs at day 7 were significantly up-regulated compared with the HOBs without TNF-α treatment. In contrast, continuous TNF-α treatment down-regulated bone sialoprotein and osteocalcin gene expression. In addition, in an indirect co-culture system, HOBs pretreated with TNF-α for 24 h induced significantly greater osteogenic differentiation of adipose tissue-derived mesenchymal stem cells (ASCs) than the HOBs without TNF-α treatment. TNF-α treatment also promoted endogenous bone morphogenetic protein 2 (BMP-2) production in HOBs, while blocking the BMP-2 signaling pathway with Noggin inhibited osteogenic differentiation of ASCs in the co-culture system. Furthermore, activation of the p38 mitogen-activated protein kinase (MAPK) signaling pathway after TNF-α treatment occurred earlier than BMP-2 protein expression. BMP-2 production by HOBs and osteogenic differentiation of ASCs in the co-culture system with HOBs was significantly decreased when HOBs were pretreated with TNF-α in combination with the p38 MAPK-specific inhibitor (SB203580). Taken together, we provide evidence that exposure duration is a critical element in determining TNF-α's effects on bone regeneration. We also demonstrate that the p38 MAPK signaling pathway regulates the expression of BMP-2 in osteoblasts, which then acts through a paracrine loop, to direct the osteoblast lineage commitment of mesenchymal stem cells.