Multipotent mesenchymal stem cells (MSCs) maintain the ability to differentiate into adipogenic, chondrogenic, or osteogenic cell lineages. There is increasing concern that exposure to environmental agents such as aryl hydrocarbon receptor (AhR) ligands, may perturb the osteogenic pathways responsible for normal bone formation. The objective of the current study was to evaluate the potential of the prototypic AhR ligand 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) to disrupt osteogenic differentiation of human bone-derived MSCs (hBMSCs) in vitro. Primary hBMSCs from three donors were exposed to 10 nM TCDD and differentiation was interrogated using select histological, biochemical, and transcriptional markers of osteogenesis. Exposure to 10 nM TCDD resulted in an overall consistent attenuation of alkaline phosphatase (ALP) activity and matrix mineralization at terminal stages of differentiation in primary hBMSCs. At the transcriptional level, the transcriptional regulator DLX5 and additional osteogenic markers (ALP, OPN, and IBSP) displayed attenuated expression; conversely, FGF9 and FGF18 were consistently upregulated in each donor. Expression of stem cell potency markers SOX2, NANOG, and SALL4 decreased in the osteogenic controls, whereas expression in TCDD-treated cells resembled that of undifferentiated cells. Coexposure with the AhR antagonist GNF351 blocked TCDD-mediated attenuation of matrix mineralization, and either fully or partially rescued expression of genes associated with osteogenic regulation, extracellular matrix, and/or maintenance of multipotency. Thus, experimental evidence from this study suggests that AhR transactivation likely attenuates osteoblast differentiation in multipotent hBMSCs. This study also underscores the use of primary human MSCs to evaluate osteoinductive or osteotoxic potential of chemical and pharmacologic agents in vitro.