Fat infiltration within the bone marrow is easily observed in some post menopausal women. Those fats are mainly derived from bone marrow mesenchymal stem cells (BMMSCs). The increment of adipocytes derived from BMMSCs leads to decreased osteoblasts derived from BMMSCs, so the bidirectional differentiation of BMMSCs significantly contributes to osteoporosis. Icariin is the main extractive of Herba Epimedii which is widely used in traditional Chinese medicine. In this experiment, we investigated the effect of icariin on the bidirectional differentiation of BMMSCs through quantitative real-time PCR, immunofluorescence, western blot, and tissue sections in vitro and in vivo. We found that icariin obviously promotes osteogenesis and inhibits adipogenesis through detecting staining and gene expression. Micro-CT analysis showed that icariin treatment alleviated the loss of cancellous bone of the distal femur in ovariectomized (OVX) mice. H&E staining analysis showed that icariin-treated OVX mice obtained higher bone mass and fewer bone marrow lipid droplets than OVX mice. Western blot and immunofluorescence showed that icariin regulates the bidirectional differentiation of BMMSCs via canonical Wnt signaling. This study demonstrates that icariin exerts its antiosteoporotic effect by regulating the bidirectional differentiation of BMMSCs through the canonical Wnt signaling pathway.