In recent years, phytochemicals have been widely researched and utilized for the treatment of various medical conditions such as cancer, cardiovascular diseases, age-related problems and are also said to have bone regenerative effects. In this study, phytol (3,7,11,15-tetramethylhexadec-2-en-1-ol), an acyclic unsaturated diterpene alcohol and a secondary metabolite derived from aromatic plants was investigated for its effect on osteogenesis. Phytol was found to be nontoxic in mouse mesenchymal stem cells (C3H10T1/2). At the cellular level, phytol-treatment promoted osteoblast differentiation, as seen by the increased calcium deposits. At the molecular level, phytol-treatment stimulated the expression of Runx2 (a bone-related transcription factor) and other osteogenic marker genes. MicroRNAs (miRNAs) play an essential role in controlling bone metabolism by targeting genes at the post-transcriptional level. Upon phytol-treatment in C3H10T1/2 cells, mir-21a and Smad7 levels were increased and decreased, respectively. It was previously reported that mir-21a targets Smad7 (an antagonist of TGF-beta1 signaling) and thus, protects Runx2 from its degradation. Thus, based on our results, we suggest that phytol-treatment promoted osteoblast differentiation in C3H10T1/2 cells via Runx2 due to downregulation of Smad7 by mir-21a. Henceforth, phytol was identified to bolster osteoblast differentiation, which in turn may be used for bone regeneration.