Rosiglitazone (Rosi), a member of the thiazolidinedione class of drugs used to treat type 2 diabetes, activates the adipocyte-specific transcription factor peroxisome proliferator-activated receptor gamma (PPARg). This activation causes bone loss in animals and humans, at least in part due to suppression of osteoblast differentiation from marrow mesenchymal stem cells (MSC). In order to identify mechanisms by which PPARg2 suppresses osteoblastogenesis and promotes adipogenesis in MSC, we have analyzed the PPARg2 transcriptome in response to Rosi. A total of 4,252 transcriptional changes resulted when Rosi (1 uM) was applied to the U-33 marrow stromal cell line, stably transfected with PPARg2 (U-33/g2), as compared to non-induced U-33/g2 cells. Differences between U-33/g2 and U-33 cells stably transfected with empty vector (U-33/c) comprised 7,928 transcriptional changes, independent of Rosi. Cell type-, time- and treatment-specific gene clustering uncovered distinct patterns of PPARg2 transcriptional control of MSC lineage commitment. The earliest changes accompanying Rosi activation of PPARg2 included adjustments in morphogenesis, Wnt signaling, and immune responses, as well as sustained induction of lipid metabolism. Expression signatures influenced by longer exposure to Rosi provided evidence for distinct mechanisms governing the repression of osteogenesis and stimulation of adipogenesis. Our results suggest interactions that could lead to the identification of a master regulatory scheme controlling osteoblast differentiation.