The Src substrate associated in mitosis of 68 kDa (Sam68) is a KH-type RNA binding protein that has been shown to regulate several aspects of RNA metabolism; however, its physiologic role has remained elusive. Herein we report the generation of Sam68-null mice by homologous recombination. Aged Sam68-/- mice preserved their bone mass, in sharp contrast with 12-month-old wild-type littermates in which bone mass was decreased up to approximately 75%. In fact, the bone volume of the 12-month-old Sam68-/- mice was virtually indistinguishable from that of 4-month-old wild-type or Sam68-/- mice. Sam68-/- bone marrow stromal cells had a differentiation advantage for the osteogenic pathway. Moreover, the knockdown of Sam68 using short hairpin RNA in the embryonic mesenchymal multipotential progenitor C3H10T1/2 cells resulted in more pronounced expression of the mature osteoblast marker osteocalcin when differentiation was induced with bone morphogenetic protein-2. Cultures of mouse embryo fibroblasts generated from Sam68+/+ and Sam68-/- littermates were induced to differentiate into adipocytes with culture medium containing pioglitazone and the Sam68-/- mouse embryo fibroblasts shown to have impaired adipocyte differentiation. Furthermore, in vivo it was shown that sections of bone from 12-month-old Sam68-/- mice had few marrow adipocytes compared with their age-matched wild-type littermate controls, which exhibited fatty bone marrow. Our findings identify endogenous Sam68 as a positive regulator of adipocyte differentiation and a negative regulator of osteoblast differentiation, which is consistent with Sam68 being a modulator of bone marrow mesenchymal cell differentiation, and hence bone metabolism, in aged mice.