Objective To investigate the mechanism of tumor necrosis factor-α (TNF)-α inhibiting osteo blastdifferentiation of mesenchymal stem cells (BMMSCs) in the pathogenesis of osteoporosis in the mouse model of systemic lupus erythematosus (MRL/lpr). Methods The femurs of MRL / lpr and C3He/HeJ mice were isolated, the bone structure were examined by hematoxylin-eosin (HE) staining. The proteins of TNF-α, NF-κB P50, bone morphogenetic protein -2 (BMP-2) and PSmad1/5/8 were measured by immunohistochemical stain. Bone marrow mesenchymal stem cells (BMMSCs) were isolated. After BMMSCs grew on the cover slips, the proteins on top of it were evaluated by immunohistochemistry stain. Moreover, the alkaline phosphatase (ALP) staining was employed for the measurement of the early osteogenic differentiation. BMMSCs together with hydroxyapatite were embedded subcutaneously in the nude mice and eight weeks later, the ectopic bone formation was evaluated. The recombinant human tumor necrosis factor receptor type Ⅱantibody fusion protein (etanercept) or normal saline was subcutaneous injected to the mice with lupus. After four weeks, the expression of these proteins was observed and the ectopic bone formation was investigated. Image-Pro plus 6.0 software was employed for imagine analysis, and Studentˊs t-test was used to test the differences between 2 independent groups. Results MRL/lpr mice showed decreased volume of cortex and the percentage of cortex to the volume of bone of MRL/lpr mice was significantly lower compared to control groups and with C3He/HeJ mice (13.96±0.25 vs 23.61±0.71, n=3, P<0.01). The protein levels of both TNF-αand NF-κB P50 on the femur of MRL/lprl mice were higher than those of the control group (0.643±0.051 vs 0.405±0.022, 0.917±0.023 vs 0.650±0.032, n=3, P<0.01). The expressions of BMP-2 on the femur of MRL/lpr mice were lower than those of the C3He/HeJ mice (0.52 ±0.03 vs 0.72 ±0.03, n=3, P<0.01). There was no difference in the expression of PSmad1/5/8 on the femur between the two groups by immunohistochemistry detection (1.264 ±0.021 vs 1.301± 0.044, n=3, P>0.05). The expressions of TNF-α and NF-κB P50 in BMMSCs of MRL/lprl mice were higher than those of the C3He/HeJ (0.184±0.021 vs 0.136±0.013, 0.132±0.021 vs 0.097± 0.014, n=3, P<0.01), while BMP-2 and PSmad were lower than those of the control group (0.128±0.013 vs 0.216±0.221, 0.115±0.023 vs 0.196±0.034, n=3, P<0.01). After 7 days of BMP-2 stimulation, the activities of ALP of BMMSCs from MRL/lprl mice were reduced detected by ALP staining and the osteoblast differentiation of these cells were decreased than BMMSCs from the control mice by HE and Masson staining. The percentage of the cortex to the volume of bone of the etanercept injection MRL/lpr mice was higher than that of the control group (21.8±1.0 vs 14.3 ±0.6, n=3, P<0.01). Moreover, the proteins of TNF-α and NF-κB P50 on the femurs of such injected mice were lower than those of the control group (0.540±0.024 vs 0.682±0.031, 0.857±0.023 vs 1.098±0.044, n=3, P<0.05), while the expressions of BMP-2 were higher than the control group (0.99±0.04 vs 0.85±0.04, n=3, P<0.05). There was no difference in the PSmad1/5/8 expression on the bone of the two group of lupus mice (0.88 ±0.08 vs 0.84 ±0.04, n=3, P>0.05). The ectopic bone formation of BMMSCs of the etanercept injected MRL/lpr mice was higher than that of the normal saline injected mice, however, it was lower than that of the C3He/HeJ mice. Conclusion TNF-α inhibits osteoblast differentiation of mesenchymal stem cells by depressing Smad signaling which may contribute to the osteoporosis of the lupus mice.