Understanding fundamental regulators of mesenchymal progenitor cells is vital for the identification of novel therapeutic targets for cancers of bone, such as osteosarcoma. Furthermore, targeting the osteoblastic niche has the potential to improve therapies for haematopoietic malignancies. Previously we have shown that retinoic acid receptor (RAR)γ knockout mice have a microenvironment-induced myeloproliferative disease, and also have reduced bone mass. This study therefore aimed to determine the effect of RAR ligands on mesenchymal progenitor cells. This was investigated by the use of the bi-potent Kusa4b10 cell line and CD51+Sca-1+ primary mesenchymal progenitor cells, isolated by FACS from collagenase-digested long bones. These cells were cultured in osteoblastic differentiation media for 28 days with or without selective RARα or RARγ agonists, RARα or RARγ antagonists, the pan-agonist all-trans retinoic acid (ATRA) or a pan-RAR-antagonist and compared to DMSO control-treated cells. The effects of the retinoids on osteoblast and adipocyte differentiation were assessed by Alizarin Red staining for mineralization, Oil Red-O staining for adipocytes and qRT-PCR for osteoblastic or adipogenic genes. RAR antagonists significantly accelerated mineralisation and increased the expression of genes associated with differentiating osteoblasts (Osterix, Alkaline Phosphatase, Parathyroid Hormone Receptor 1 and Osteocalcin). In contrast, RAR agonists inhibited differentiation along both the osteoblastic and adipogenic lineages and also slowed the proliferation of the cells. Furthermore, when RAR agonists were washed out of the cultures, the cells could be induced to differentiate into osteoblasts and adipocytes. This study suggests that RAR agonists maintain bi-potential osteoblast/adipocyte progenitors in culture, whereas RAR antagonists promote the differentiation of these cells into osteoblasts. This provides the basis for further investigation into whether retinoids have therapeutic potential in treating cancers such as osteosarcoma or can be used to alter the osteoblastic niche to aid in the treatment of haematopoietic malignancies.