Multiple regulatory mechanisms control osteoblast differentiation and function to ensure unperturbed skeletal formation and remodeling. In this study we identify histone lysine-specific demethylase 1(LSD1/KDM1A) as a key epigenetic regulator of osteoblast differentiation. Knockdown of LSD1 promoted osteoblast differentiation of human mesenchymal stem cells (hMSCs) in vitro and mice lacking LSD1 in mesenchymal cells displayed increased bone mass secondary to accelerated osteoblast differentiation. Mechanistic in vitro studies revealed that LSD1 epigenetically regulates the expression of WNT7B and BMP2. LSD1 deficiency resulted in increased BMP2 and WNT7B expression in osteoblasts and enhanced bone formation, while downregulation of WNT7B- and BMP2-related signaling using genetic mouse model or small-molecule inhibitors attenuated bone phenotype in vivo. Furthermore, the LSD1 inhibitor tranylcypromine (TCP) could increase bone mass in mice. These data identify LSD1 as a novel regulator of osteoblast activity and suggest LSD1 inhibition as a potential therapeutic target for treatment of osteoporosis.