Tumors, traumata, burn injuries or surgeries can lead to critical-sized bony defects which need to be reconstructed. Mesenchymal stem cells (MSCs) have the ability to differentiate into multiple cell lineages and thus present a promising alternative for use in tissue engineering and reconstruction. However, there is an ongoing debate whether all MSCs are equivalent in their differentiation and proliferation ability. The goal of this study was to assess osteogenic and adipogenic characteristic changes of adipose-derived stem cells (ASCs) and bone marrow-derived stem cells (BMSCs) upon Myostatin inhibition with Follistatin in vitro and in vivo. We harvested ASCs from mice inguinal fat pads and BMSCs from tibiae of mice. By means of histology, real-time cell analysis, immunohistochemistry, and PCR osteogenic and adipogenic proliferation and differentiation in the presence or absence of Follistatin were analyzed. In vivo, osteogenic capacity was investigated in a tibial defect model of wild-type (WT) mice treated with mASCs and mBMSCs of Myo-/- and WT origin. In vitro, we were able to show that inhibition of Myostatin leads to markedly reduced proliferative capacity in mBMSCs and mASCs in adipogenic differentiation and reduced proliferation in osteogenic differentiation in mASCs, whereas proliferation in mBMSCs in osteogenic differentiation was increased. Adipogenic differentiation was inhibited in mASCs and mBMSCs upon Follistatin treatment, whereas osteogenic differentiation was increased in both cell lineages. In vivo, we could demonstrate increased osteoid formation in WT mice treated with mASCs and mBMSCs of Myo-/- origin and enhanced osteogenic differentiation and proliferation of mASCs of Myo-/- origin. We could demonstrate that the osteogenic potential of mASCs could be raised to a level comparable to mBMSCs upon inhibition of Myostatin. Moreover, Follistatin treatment led to inhibition of adipogenesis in both lineages.