Tankyrase is part of poly (ADP-ribose) polymerase superfamily required for numerous cellular and molecular processes. Tankyrase inhibition negatively regulates Wnt pathway. Thus, Tankyrase inhibitors have been extensively investigated for the treatment of clinical conditions associated with activated Wnt signaling such as cancer and fibrotic diseases. Moreover, Tankyrase inhibition has been recently reported to upregulate osteogenesis through the accumulation of SH3 domain-binding protein 2, an adaptor protein required for bone metabolism. In this study, we investigated the effect of Tankyrase inhibition in osteoblast differentiation of human skeletal (mesenchymal) stem cells (hMSCs). A Tankyrase inhibitor, XAV-939, identified during a functional library screening of small molecules. Alkaline phosphatase activity and Alizarin red staining were employed as markers for osteoblastic differentiation and in vitro mineralized matrix formation, respectively. Global gene expression profiling was performed using the Agilent microarray platform. XAV-939, a Tankyrase inhibitor, enhanced osteoblast differentiation of hBMSCs as evidenced by increased ALP activity, in vitro mineralized matrix formation, and upregulation of osteoblast-related gene expression. Global gene expression profiling of XAV-939-treated cells identified 847 upregulated and 614 downregulated mRNA transcripts, compared to vehicle-treated control cells. It also points towards possible changes in multiple signaling pathways, including TGFβ, insulin signaling, focal adhesion, estrogen metabolism, oxidative stress, RANK-RANKL (receptor activator of nuclear factor κB ligand) signaling, Vitamin D synthesis, IL6, and cytokines and inflammatory responses. Further bioinformatic analysis, employing Ingenuity Pathway Analysis identified significant enrichment in XAV-939-treated cells of functional categories and networks involved in TNF, NFκB, and STAT signaling. We identified a Tankyrase inhibitor (XAV-939) as a powerful enhancer of osteoblastic differentiation of hBMSC that may be useful as a therapeutic option for treating conditions associated with low bone formation.