In osteoporosis, mesenchymal stem cells (MSCs) prefer to differentiate into adipocytes at the expense of osteoblasts. Although the balance between adipogenesis and osteogenesis has been closely examined, the mechanism of commitment determination switch is unknown. Here we demonstrate that phospholipase D1 (PLD1) plays a key switch in determining the balance between bone and fat mass. Ablation of Pld1 reduced bone mass but increased fat in mice. Mechanistically, Pld1 MSCs inhibited osteoblast differentiaion with diminished Runx2 expression, while osteoclast differentiation was accelerated in Pld1 bone marrow-derived macrophages. Pld1 osteoblasts showed decreased expression of osteogenic makers. Increased number and resorption activity of osteoclasts in Pld1 mice were corroborated with upregulation of osteoclastogenic markers. Moreover, Pld1 osteoblasts reduced β-catenin mediated-osteoprotegerin (OPG) with increased RANKL/OPG ratio which resulted in accelerated osteoclast differentiation. Thus, low bone mass with upregulated osteoclasts could be due to the contribution of both osteoblasts and osteoclasts during bone remodeling. Moreover, ablation of Pld1 further increased bone loss in ovariectomized mice, suggesting that PLD1 is a negative regulator of osteoclastogenesis. Furthermore, loss of PLD1 increased adipogenesis, body fat mass, and hepatic steatosis along with upregulation of PPAR-γ and C/EBPα. Interestingly, adipocyte-specific Pld1 transgenic mice rescued the compromised phenotypes of fat mass and adipogenesis in Pld1 knockout mice. Collectively, PLD1 regulated the bifurcating pathways of mesenchymal cell lineage into increased osteogenesis and decreased adipogenesis, which uncovered a previously unrecognized role of PLD1 in homeostasis between bone and fat mass.