Multiple myeloma (MM) is characterized by the impaired osteogenic differentiation of mesenchymal stromal cells (MSCs). However, the underlying molecular mechanisms are still poorly understood. Long noncoding RNAs (lncRNAs) are emerging as important regulatory molecules in tumor-suppressor and oncogenic pathways. Here we showed that MSCs from MM expressed less lncRNA MEG3 relative to those from normal donors during osteogenic differentiation. To evaluate the effect of MEG3 on osteogenesis, bone marrow MSCs with enhanced or reduced MEG3 were prepared. We observed that MEG3 knockdown significantly reduced the expression of key osteogenic markers, including Runt-related transcription factor 2, osterix, and osteocalcin, while overexpression of MEG3 enhanced their expression. Additionally, MEG3 knockdown decreased BMP4 transcription. Here we showed that MEG3 was critical for SOX2 transcriptional repression of the BMP4. MEG3, which is located near the BMP4 gene, could dissociate the transcription factor SOX2 from the BMP4 promoter. A stable complex containing the MEG3, SOX2, and the SOX2 consensus site of BMP4 suggested that MEG3 activated transcriptional activity by directly influencing SOX2 activity. By using assays such as luciferase, chromatin immunoprecipitation, and RNA immunoprecipitation, we showed that MEG3 had a critical function in a mechanism of promoter-specific transcriptional activation. These results suggested that MEG3 played an essential role in osteogenic differentiation in bone marrow MSCs, partly by activating BMP4 transcription. Our data provided novel evidence for the biological and clinical significance of lncRNA MEG3 expression as a potential biomarker for identifying patients with MM and as a potential therapeutic target in MM.