Mesenchymal stem cells (MSCs) are multipotent progenitor nonhematopoietic cells that have emerged as an attractive cell source for tissue engineering. Biglycan (BGN), an extracellular matrix component, has been reported to play a crucial role in bone formation. However, the role of BGN in MSCs remains unknown. Using lentiviral gene delivery, we sought to investigate the cellular effects of BGN on proliferation and osteogenic potential of bone marrow-derived MSCs in vitro. We found that MSCs with lentiviral transduction of BGN exhibited an increase in growth ability and the percentage of the S phase, together with significantly reduced mRNA levels of p21 and p27. Furthermore, lentiviral transduction of BGN in MSCs also increased alkaline phosphatase activity, stimulated the mineralization capacity, and enhanced expression of Runx2, Osteocalcin, collagen I, transforming growth factor (TGF)-β1, p-Smad2 and p-Smad3. Taken together, our data suggest that BGN overexpression positively regulates proliferation and osteogenic potential of MSCs, and TGF-β signaling pathway may be involved in BGN-induced osteogenic potential of MSCs.