Adipogenesis plays a key role in the pathogenesis of obesity. It begins with the commitment of mesenchymal stem cells (MSCs) to the adipocyte lineage, followed by terminal differentiation of preadipocytes to mature adipocytes. A critical, but poorly understood, component of adipogenesis involves proliferation of MSCs and preadipocytes. The present study was undertaken to examine the hypothesis that bone morphogenetic protein-3 (BMP-3) promotes adipogenesis using C3H10T1/2 MSCs and 3T3-L1 preadipocytes as in vitro model systems. We demonstrated that although it did not promote the commitment of MSCs to the adipocyte lineage or the differentiation of preadipocytes to adipocytes, BMP-3-stimulated proliferation by threefold in both cell types. Owing to a lack of information on MSC proliferation, we then delineated the molecular mechanisms underlying BMP-3-stimulated MSC proliferation. We showed that BMP-3 activated the transforming growth factor-beta (TGF-beta)/activin but not ERK1/2, p38 MAPK, or JNK signaling pathways in C3H10T1/2 cells. Furthermore, the TGF-beta/activin receptor kinase inhibitor SB-431542 blocked BMP-3-stimulated proliferation. Importantly, siRNA-mediated knockdown of the key TGF-beta/activin signaling pathway components, ActRIIB, ALK4, or Smad2, abrogated the mitogenic effects of BMP-3 on MSCs. Together, these results demonstrate that BMP-3 stimulates MSC proliferation via the TGF-beta/activin signaling pathway, thus revealing a novel role for this divergent and poorly understood member of the TGF-beta superfamily in regulating MSC proliferation.