Dexamethasone (Dex) regulates osteoblastic and adipocytic differentiation in mesenchymal progenitor cells through regulation of Wnt/β-catenin signaling. To elucidate the regulatory mechanisms underlying the effects of Dex, we examine the expression of Axin2, which is an intracellular inhibitor of Wnt/β-catenin signaling, in ROB-C26 clonal mesenchymal progenitor cells (C26). We observed the induction of Axin2 mRNA in C26 cells in response to Dex treatment. Treatment with a glucocorticoid receptor (GR) antagonist, mifepristone, showed that Dex-induced up-regulation of Axin2 is mediated by the GR. In the absence of Dex, gene silencing by using Axin2-targeted short hairpin RNA increased the number of alkaline phosphatase (ALP)-positive and nuclear β-catenin-positive cells and ALP activity. In the presence of Dex, Axin2 knockdown resulted in an increased number of ALP-positive and nuclear β-catenin-positive cells. Furthermore, Axin2 knockdown in Dex-treated cells suppressed adipocyte differentiation (as determined by reduced Oil Red O staining), reduced the number of PPARγ-positive and aP2-positive cells and decreased the mRNA expression of PPARγ2 and aP2. These results suggest that Axin2 plays a key role in adipocyte and osteoblastic differentiation by controlling β-catenin expression.