Mesenchymal stem cells from bone marrow (BM-MSCs) and adipose tissue (AT-MSCs) are attractive tools for cell-based therapies to repair bone tissue. In this study, we investigated the osteogenic and adipogenic potential of BM-MSCs and AT-MSCs as well as the effect of crosstalk between osteoblasts and adipocytes on cell phenotype expression. Rat BM-MSCs and AT-MSCs were cultured either in growth, osteogenic, or adipogenic medium to evaluate osteoblast and adipocyte differentiation. Additionally, osteoblasts and adipocytes were indirectly co-cultured to investigate the effect of adipocytes on osteoblast differentiation and vice versa. BM-MSCs and AT-MSCs exhibit osteogenic and adipogenic potential under non-differentiation-inducing conditions. When exposed to osteogenic medium, BM-MSCs exhibited higher expression of bone markers compared with AT-MSCs. Conversely, under adipogenic conditions, AT-MSCs displayed higher expression of adipose tissue markers compared with BM-MSCs. The presence of adipocytes as indirect co-culture repressed the expression of the osteoblast phenotype, whereas osteoblasts did not exert remarkable effect on adipocytes. The inhibitory effect of adipocytes on osteoblasts was due to the release of tumor necrosis factor alpha (TNF-α) in culture medium by adipocytes. Indeed, the addition of exogenous TNF-α in culture medium repressed the differentiation of BM-MSCs into osteoblasts mimicking the indirect co-culture effect. In conclusion, our study showed that BM-MSCs are more osteogenic while AT-MSCs are more adipogenic. Additionally, we demonstrated the key role of TNF-α secreted by adipocytes on the inhibition of osteoblast differentiation. Thus, we postulate that the higher osteogenic potential of BM-MSCs makes them the first choice for inducing bone repair in cell-based therapies.