Cell fate determination of human mesenchymal stem/stromal cells (hMSCs) is precisely regulated by lineage-specific transcription factors and epigenetic enzymes. We found that CTR9, a key scaffold subunit of polymerase-associated factor complex (PAFc), selectively regulates hMSC differentiation to osteoblasts and chondrocytes, but not to adipocytes. An in vivo ectopic osteogenesis assay confirmed the essentiality of CTR9 in hMSC-derived bone formation. CTR9 counteracts the activity of Enhancer Of Zeste 2 (EZH2), the epigenetic enzyme that deposits H3K27me3, in hMSCs. Accordingly, CTR9 knockdown (KD) hMSCs gain H3K27me3 mark, and the osteogenic differentiation defects of CTR9 KD hMSCs can be partially rescued by treatment with EZH2 inhibitors. Transcriptome analyses identified bone morphology protein-2 (BMP-2) as a downstream effector of CTR9. BMP-2 secretion, membrane anchorage, and the BMP-SMAD pathway were impaired in CTR9 KD MSCs, and the effects were rescued by BMP-2 supplementation. This study uncovers an epigenetic mechanism engaging the CTR9-H3K27me3-BMP-2 axis to regulate the osteochondral lineage differentiation of hMSCs.