TGF-β1, a multifunctional regulator of cell growth and differentiation, is the most abundant bone matrix growth factor. During differentiation of human bone stromal cells (hBMSCs), which constitute bone marrow osteoblast (OS) and adipocyte (AD) progenitor cells, continuous TGF-β1 (10 ng/ml) treatment enhanced OS differentiation as evidenced by increased mineralised matrix production. Conversely, pulsed TGF-β1 administration during the commitment phase increased mature lipid-filled adipocyte numbers. Global gene expression analysis using DNA microarrays in hBMSCs treated with TGF-β1 identified 1587 up- and 1716 down-regulated genes in OS-induced, TGF-β1-treated compared to OS-induced hBMSCs (2.0 fold change (FC), p < 0.05). Gene ontology (GO) analysis revealed enrichment in ‘osteoblast differentiation’ and ‘skeletal system development-associated’ genes and up-regulation of several genes involved in ‘osteoblastic-differentiation related signalling pathways’. In AD- induced, TGF-β1-treated compared to AD-induced hBMSCs, we identified 323 up- and 369 down-regulated genes (2.0 FC, p < 0.05) associated with ‘fat cell differentiation’, ‘fatty acid derivative biosynthesis process’, ‘fatty acid derivative metabolic process’, and ‘inositol lipid-mediated’. Serpin peptidase inhibitor, clade B (ovalbumin), member 2 (SERPINB2) was down-regulated 3-fold in TGF-β1-treated hBMSCs. siRNA-mediated SERPINB2 inhibition enhanced OS and AD differentiation. Thus, TGF-β signalling is important for hBMSC OS and AD differentiation and SERPINB2 is a TGF-β-responsive gene that plays a negative regulatory role in hBMSC differentiation.