Superparamagnetic iron oxide (SPIO) nanoparticles are very useful for monitoring cell trafficking in vivo and distinguish whether cellular regeneration originated from an exogenous cell source, which is a key issue for developing successful stem cell therapies. However, the impact of SPIO labeling on stem cell behavior remains uncertain. Here, we show the inhibitory effect of Ferucarbotran, an ionic SPIO, on osteogenic differentiation and its signaling mechanism in human mesenchymal stem cells. Ferucarbotran caused a dose-dependent inhibition of osteogenic differentiation, abolished the differentiation at high concentration, promoted cell migration, and activated the signaling molecules, β-catenin, a cancer/testis antigen, SSX, and matrix metalloproteinase 2 (MMP2). An iron chelator, desferrioxamine, suppressed all the above Ferucarbotran-induced actions, demonstrating an important role of free iron in the inhibition of osteogenic differentiation that is mediated by the promotion of cell mobilization, involving the activation of a specific signaling pathway.