Peroxiredoxin II (Prx II), an antioxidant enzyme in the Prx family, reduces oxidative stress by decreasing the intracellular ROS levels. Osteoblast differentiation is promoted by bone morphogenetic protein 2 (BMP2), which upregulates the expression of osteoblast differentiation marker genes, through Smad1/5/9 phosphorylation. We found that Prx II expression was increased by a high dose of lipopolysaccharide (LPS) but was not increased by a low dose of LPS. Prx II itself caused a decrease in the osteogenic gene expression, alkaline phosphatase (ALP) activity, and Smad1/5/9 phosphorylation induced by BMP2. In addition, BMP2-induced osteogenic gene expression and ALP activity were higher in Prx II knockout (KO) cells than they were in wild-type (WT) cells. These inhibitory effects were mediated by protein phosphatase 2A Cα (PP2A Cα), which was increased and is known to induce the dephosphorylation of Smad1/5/9. The overexpression of Prx II increased the expression of PP2A Cα, and PP2A Cα was not expressed in Prx II KO cells. Moreover, PP2A Cα reduced the level of BMP2-induced osteogenic gene expression and Smad1/5/9 phosphorylation. LPS inhibited BMP2-induced Smad1/5/9 phosphorylation and the suppressed phosphorylation was restored by the PP2A inhibitor okadaic acid (OA). Bone phenotype analyses using microcomputed tomography (μCT) revealed that the Prx II KO mice had higher levels of bone mass than the levels of the WT mice. We hypothesize that Prx II has a negative role in osteoblast differentiation through the PP2A-dependent dephosphorylation of Smad1/5/9.