For mesenchymal stem cells derived from bone marrow, a controlled reduction in ambient oxygen concentration has been recognized as a facilitator of osteogenic differentiation and the formation of calcium nodules. However, the specific molecular mechanisms underlying this phenotype remain unclear. The aim of this study was to elucidate the impact of hypoxia on the osteogenic differentiation of bone marrow mesenchymal stem cells (BMSCs) and to explore the involvement of mitophagy and the regulation of mitochondrial dynamics mediated by the mitochondrial dynamic regulatory factor FUN14 domain-containing 1 (FUNDC1). Our findings suggest that FUNDC1 is required for promoting osteogenic differentiation in BMSCs under hypoxic conditions. However, this effect was not dependent on FUNDC1-mediated mitophagy but rather on FUNDC1-mediated regulation of mitochondrial fission. At the mechanistic level, FUNDC1 binds more DNM1L and less OPA1 under hypoxic conditions, leading to an upsurge in mitochondrial division. This heightened mitochondrial division culminates in the increased translocation of Parkin to mitochondria, diminishing its interactions with HIF1α in the cytoplasm and consequently facilitating HIF1α deubiquitination and stabilization. In summary, FUNDC1-regulated mitochondrial division in hypoxic culture emerges as a critical determinant for the translocation of Parkin to mitochondria, ultimately maintaining HIF1α stabilization and promoting osteogenic differentiation.