The Jiawei Yanghe decoction (JWYHD) is a traditional Chinese medicine formula for the treatment of osteoporosis, but its therapeutic mechanism has not been fully elucidated, and the therapeutic target of the intervention disease needs to be further verified. The dysfunction of bone mesenchymal stem cells (BMSCs) is considered to be an important pathogenesis of postmenopausal osteoporosis (PMOP). The purpose of this study was to explore how JWYHD regulates BMSC differentiation through the BMP-SMAD signal pathway.In the in vivo study, we used an ovariectomized PMOP rat (n = 36, 2-month-old, 200 ± 20 g) model and femur micro-CT analysis to study the effect of JWYHD on bone loss in rats. By immunofluorescence, the translocation expression of BMP2, a key protein in the pathway, was detected. Serum bone metabolism was detected by an enzyme-linked immunosorbent assay (ELISA). Alkaline phosphatase (ALP) activity was detected by alkaline phosphatase staining (ALPS), osteogenesis and matrix mineralization were detected by alizarin red staining (ARS), the adipogenic ability of BMSCs was detected by oil red staining (ORS), and CFU is used to detect the ability of cells to form colonies. The expression of related proteins was detected by western blotting.In vivo and in vitro, the OP phenotypes of SD rats induced by ovariectomy (OVX) included impaired bone mineral density and microstructure, abnormal bone metabolism, and impaired MSC differentiation potential. JWYHD treatment reversed this trend and restored the differentiation potential of MSCs. JWYHD medicated serum and direct intervention of drugs activated the BMP-SMAD signaling pathway, promoted the osteogenic differentiation of BMSCs, and inhibited their adipogenic differentiation.Our data identified that JWYHD is an effective alternative drug for the treatment of PMOP that functions to stimulate the differentiation of BMSCs into osteoblasts in the BMP-SMAD signaling-dependent mechanism.Copyright © 2022 Yunfeng Luo et al.