C aspase-3 is a critical enzyme for apoptosis and cell survival. Here we report delayed ossification and decreased bone mineral density in caspase-3–deficient (Casp3^–/– and Casp3^+/–) mice due to an attenuated osteogenic differentiation of bone marrow stromal stem cells (BMSSCs). The mechanism involved in the impaired differentiation of BMSSCs is due, at least partially, to the overactivated TGF-β/Smad2 signaling pathway and the upregulated expressions of p53 and p21 along with the downregulated expressions of Cdk2 and Cdc2, and ultimately increased replicative senescence. In addition, the overactivated TGF-β/Smad2 signaling may result in the compromised Runx2/Cbfa1 expression in preosteoblasts. Furthermore, we demonstrate that caspase-3 inhibitor, a potential agent for clinical treatment of human diseases, caused accelerated bone loss in ovariectomized mice, which is also associated with the overactivated TGF-β/Smad2 signaling in BMSSCs. This study demonstrates that caspase-3 is crucial for the differentiation of BMSSCs by influencing TGF-β/Smad2 pathway and cell cycle progression.