Mesenchymal stem cells (MSCs) within their native environment of the stem cell niche in bone receive biochemical stimuli from surrounding cells. These stimuli likely influence how MSCs differentiate to become bone precursors. The ability of MSCs to undergo osteogenic differentiation is well established in vitro; however, the role of the natural cues from bone's regulatory cells, osteocytes and osteoblasts in regulating the osteogenic differentiation of MSCs in vivo are unclear. In this study we delineate the role of biochemical signalling from osteocytes and osteoblasts, using conditioned media and co-culture experiments, to understand how they direct osteogenic differentiation of MSCs. Furthermore, the synergistic relationship between osteocytes and osteoblasts is examined by transwell co-culturing of MSCs with both simultaneously. Osteogenic differentiation of MSCs was quantified by monitoring alkaline phosphatase (ALP) activity, calcium deposition and cell number. Intracellular ALP was found to peak earlier and there was greater calcium deposition when MSCs were co-cultured with osteocytes rather than osteoblasts, suggesting that osteocytes are more influential than osteoblasts in stimulating osteogenesis in MSCs. Osteoblasts initially stimulated an increase in the number of MSCs, but ultimately regulated MSC differentiation down the same pathway. Our novel co-culture system confirmed a synergistic relationship between osteocytes and osteoblasts in producing biochemical signals to stimulate the osteogenic differentiation of MSCs. This study provides important insights into the mechanisms at work within the native stem cell niche to stimulate osteogenic differentiation and outlines a possible role for the use of co-culture or conditioned media methodologies for tissue engineering applications.