Adipose-derived stem cells represent a type of mesenchymal stem cells with the attendant capacity to self-renew and differentiate into multiple cell lineages. We have performed a microarray-based gene expression profiling of osteogenic differentiation and found that the transcription factor Sox11 is down-regulated during the process. Functional assays demonstrate that down-regulation of Sox11 is required for an efficient differentiation. Furthermore, results from forced expression of constitutively-active and dominant-negative derivatives of Sox11 indicate that Sox11 functions as a transcriptional activator in inhibiting osteogenesis. Sox11 thus represents a novel regulator of osteogenesis whose expression and activity can be potentially manipulated for controlled differentiation.