Histone deacetylase inhibitors such as sodium butyrate are known to regulate the differentiation of a variety of cells. Mesenchymal stem cells (MSCs) differentiate into osteoblasts and adipocytes under transcriptional control of Runx2 and PPARγ2, respectively. How these two transcription factors are regulated by sodium butyrate in order to specify the alternate cell fates remains a pivotal question. Sodium butyrate stimulated osteogenic differentiation and increased expression of Runx2 and genes regulated by Runx2 when cells were induced to undergo osteogenic differentiation. Sodium butyrate suppressed the adipogenic differentiation and decreased the expression of PPARγ2 and LPL when MSCs were treated under conditions that promote adipogenic differentiation. Sodium butyrate also decreased the ratio of RANKL/OPG gene expression by MSCs. Analysis of MSCs induced in the presence of sodium butyrate revealed an immediate increase in ERK phosphorylation by sodium butyrate. The MEK-specific inhibitor, PD98059 but not p38- or JNK-specific inhibitor and the transfection with dominant negative ERK expressing plasmids blocked the sodium butyrate-induced regulation of MSC differentiation and increase in the RANKL/OPG ratio. Our results suggest that sodium butyrate modulates MSC differentiation and the RANKL/OPG ratio via activating ERK, and could be applied for in vivo bone growth using MSCs.