To study the role of M2 macrophage-derived exosomes (M2-exo) in osteogenic differentiation and Hedgehog signaling pathway of mouse bone marrow mesenchymal stem cells (BMSCs) under in vitro high-glucose and high-insulin conditions. RAW 264.7 cells were induced toward M2 macrophage polarization and then M2-exo were extracted and identified. Immunofluorescence assay was performed to detect the internalization of M2-exo by BMSCs. BMSCs were divided into the normal control group (Control group), the high-glucose and high-insulin group (HGI group), and the HGI with M2-exo intervention group (HGI+M2e group). BMSCs in the Control group were cultured in osteogenic inductive medium with 5.5 mmol/L glucose, but no insulin or M2-exo. BMSCs in the HGI group were cultured in osteogenic inductive medium with 25 mmol/L glucose and 174 nmol/L insulin. BMSCs in the HGI+M2e group were cultured in the same medium as that of the HGI group, with the additional treatment of 6, 30, 60 μg/mL M2-exo, respectively. After osteogenic induction for 7 days and 14 days, alkaline phosphatase (ALP) staining and alizarin red staining were performed respectively to assess the osteogenic differentiation potential of BMSCs from different groups. In addition, BMSCs in the Control group, HGI group, and HGI+M2e group treated with 30 μg/mL M2-exo were examined with qPCR after osteogenic induction for 14 days and Western blot after osteogenic induction for 21 days to assess the osteogenesis and the expression of Hedgehog pathway-related genes and proteins. M2 macrophage polarization was induced successfully, with highly positive expression of CD206, the M2 polarization surface marker. The M2-exo had the typical structure of round or oval-shaped bilayered-membrane vesicles. The diameter distribution of M2-exo ranged from 50 to 125 nm (accounting for 99.14% of all M2-exo). M2-exo samples showed positive expression of exosomal markers CD9, CD63 and CD81 proteins. Immunofluorescence staining showed that M2-exo were taken up and internalized by BMSCs. After osteogenic induction for 7 days, the ALP activity of BMSCs in the HGI group was lower than that of the Control group. After interventions of 6 μg/mL, 30 μg/mL, and 60 μg/mL M2-exo, the ALP activity of the HGI+M2-exo group was significantly increased compared with that of the HGI group ( P<0.05). After osteogenic induction for 14 days, the number of mineralized nodules in the HGI group was lower than that in the Control group, and after intervention, only the HGI+M2e group treated with 30 μg/mL M2-exo showed higher level of mineralization than that in the HGI group ( P<0.05). qPCR analysis revealed that the expression levels of the osteogenesis-related genes, including Runx2, Alp and Ocn, and Hedgehog pathway-related genes, including Gli1, Smo and Ptch1, were downregulated in the HGI group, all being lower than those of the Control group to varying degrees, while 30 μg/mL M2-exo treatment could promote the up-regulation of these genes, showing significant difference in comparison with their expression levels in the HGI group ( P<0.05). In addition, Western blot analysis showed that the expression of the osteogenesis-related proteins, including RUNX2 and COL1A1, and GLI1, the Hedgehog signaling pathway protein, was down-regulated in the HGI group, while the expression of COL1A1 and GLI1 was up-regulated after 30 μg/mL M2-exo treatment, showing significant difference when compared with that of the HGI group ( P<0.05). High glucose and high insulin had inhibitory effect on the osteogenic differentiation potential of BMSCs. After intervention with M2-exo, the Hedgehog signaling pathway in BMSCs was activated and the osteogenic differentiation potential was enhanced, suggesting that M2-exo might have therapeutic potentials for the treatment of diabetic bone disease.