Epigenetic mechanisms regulate osteogenic lineage differentiation of mesenchymal stromal cells. Histone methylation is controlled by multiple lysine demethylases and is an important step in controlling local chromatin structure and gene expression. Here, we show that the lysine-specific histone demethylase Kdm1A/Lsd1 is abundantly expressed in osteoblasts and that its suppression impairs osteoblast differentiation and bone nodule formation in vitro. Although Lsd1 knockdown did not affect global H3K4 methylation levels, genome-wide ChIP-Seq analysis revealed high levels of Lsd1 at gene promoters and its binding was associated with di- and tri-methylation of histone 3 at lysine 4 (H3K4me2 and H3K4me3). Lsd1 binding sites in osteoblastic cells were enriched for the Runx2 consensus motif suggesting a functional link between the two proteins. Importantly, inhibition of Lsd1 activity decreased osteoblast activity in vivo. In support, mesenchymal-targeted knockdown of Lsd1 led to decreased osteoblast activity and disrupted primary spongiosa ossification and reorganization in vivo. Together, our studies demonstrate that Lsd1 occupies Runx2-binding cites at H3K4me2 and H3K4me3 and its activity is required for proper bone formation.