We recently showed that patients with primary Sjögren Syndrome (pSS) have significantly higher bone mineral density (BMD) compared to healthy controls. The majority of those patients (69%) was using hydroxychloroquine (HCQ), which may have favourable effects on BMD. To study the direct effects of HCQ on human MSC-derived osteoblast activity. Osteoblasts were cultured from human mesenchymal stromal cells (hMSCs). Cultures were treated with different HCQ doses (control, 1 and 5 µg/ml). Alkaline phosphatase activity and calcium measurements were performed to evaluate osteoblast differentiation and activity, respectively. Detailed microarray analysis was performed in 5 µg/ml HCQ-treated cells and controls followed by qPCR validation. Additional cultures were performed using the cholesterol synthesis inhibitor simvastatin (SIM) to evaluate a potential mechanism of action. We showed that HCQ inhibits both MSC-derived osteoblast differentiation and mineralization in vitro. Microarray analysis and additional PCR validation revealed a highly significant up-regulation of the cholesterol biosynthesis, lysosomal and extracellular matrix pathways in the 5 µg/ml HCQ-treated cells compared to controls. Besides, we demonstrated that 1 µM SIM also decreases MSC-derived osteoblast differentiation and mineralization compared to controls. It appears that the positive effect of HCQ on BMD cannot be explained by a stimulating effect on the MSC-derived osteoblast. The discrepancy between high BMD and decreased MSC-derived osteoblast function due to HCQ treatment might be caused by systemic factors that stimulate bone formation and/or local factors that reduce bone resorption, which is lacking in cell cultures.