Free fatty acids display diverse effects as signalling molecules through GPCRs in addition to their involvement in cellular metabolism. GPR120, a G protein-coupled receptor for long-chain unsaturated fatty acids, has been reported to mediate adipogenesis in lipid metabolism. However, whether GPR120 also mediates osteogenesis and regulates BMMSCs remain unclear. In this study, we showed that GPR120 targeted the bi-potential differentiation of BMMSCs in a ligand dose-dependent manner. High concentrations of TUG-891 (a highly selective agonist of GPR120) promoted osteogenesis via the Ras-ERK1/2 cascade, while low concentrations elevated P38 and increased adipogenesis. The fine molecular regulation of GPR120 was implemented by up-regulating different integrin subunits (α1, α2 and β1; α5 and β3). The administration of high doses of TUG-891 rescued oestrogen-deficient bone loss in vivo, further supporting an essential role of GPR120 in bone metabolism. Our findings, for the first time, showed that GPR120-mediated cellular signalling determines the bi-potential differentiation of BMMSCs in a dose-dependent manner. Additionally, the induction of different integrin subunits was involved in the cytoplasmic regulation of a seesaw-like balance between ERK and p38 phosphorylation. These findings provide new hope for developing novel remedies to treat osteoporosis by adjusting the GPR120-mediated differentiation balance of BMMSCs.