For the treatment of diseases affecting bones using bone regenerative medicine, there is an urgent need to develop safe, inexpensive drugs that can strongly induce bone formation. In the present study, we systematically investigated the effects of icaritin, a metabolic product of icariin, on the osteogenic differentiation of human bone marrow‑derived mesenchymal stem cells (hBMSCs) and human adipose tissue‑derived stem cells (hADSCs) in vitro. After treatment with icaritin at concentrations of 10‑8-10‑5 M, hBMSCs and hADSCs were examined for alkaline phosphatase activity, osteocalcin (OC) secretion, matrix mineralization and expression levels of bone‑related mRNA and proteins. Data showed that icaritin at concentrations 10‑7-10‑5 M significantly increased alkaline phosphatase activity, OC secretion at different time points, and calcium deposition at day 21. In addition, icaritin upregulated the mRNA expression of genes for bone morphogenetic proteins (BMP‑2, ‑4 and ‑7), bone transcription factors (Runx2 and Dlx5) and bone matrix proteins (ALP, OC and Col‑1). Moreover, icaritin increased the protein levels of BMPs, Runx2 and OC, as detected by western blot analysis. These findings suggest that icaritin enhances the osteogenic differentiation of hBMSCS and hADSCs. Icaritin exerts its potent osteogenic effect possibly by directly stimulating the production of BMPs. Although the osteogenic activity of icaritin in vitro was inferior to that of rhBMP‑2, icaritin displayed better results than icariin. Moreover, the low cost, simple extraction procedure, and an abundance of icaritin make it appealing as a bone regenerative medicine.