The plasticity of mesenchymal stem cells (MSC) is of major interest for diagnosis and therapy of bone diseases. Interactions between osteoblasts and adipocytes seem to be involved in the pathogenesis of osteoporosis. This review is intended to elucidate a link between osteoarthritis and the differentiation of MSCs towards the adipocytic or osteoblastic lineage. Viewing osteoarthritis as a systemic disease, recent data underline the importance of the nuclear receptor peroxisome proliferator activated receptor gamma (PPARγ) in its pathogenesis. In contrast to the increase in fat mass in osteoporosis, in OA, there is evidence of a decrease in PPARγ signaling with increasing severity of OA. Therefore, not the differentiation of osteoblasts to adipocytes, but the development from adipocytes to osteoblasts might be a mechanism relevant to the pathogenesis of osteoarthritis.