Adult mesenchymal stem cells (MSCs) have the capability to differentiate along several lineages including those of bone, cartilage, tendon and muscle, thus offering huge potential for the field of tissue engineering. The purpose of this study was to characterise the differentiation capacity of rat MSCs cultured on standard plastic coverslips in 2 dimensions and on a novel collagen glycosaminoglycan scaffold in the presence of a standard combination of osteoinductive factors. Cells were cultured for 3, 7, 14 and 21 days and several markers of osteogenesis were analysed. While the initial response of the cells in 3-D seemed to be faster than cells cultured in 2-D, as evidenced by collagen type I expression, later markers showed that osteogenic differentiation of MSCs took longer in the 3-D environment of the collagen GAG scaffold compared to standard 2-D culture conditions. Furthermore, it was shown that complete scaffold mineralisation could be evoked within a 6 week timeframe. This study further demonstrates the potential use of MSC-seeded collagen GAG scaffolds for bone tissue engineering applications.