The aim of the present study was to investigate the anti-osteoporotic activity of Baohuoside I, an active component of Herba Epimedii. Effects of Baohuoside I on the differentiation of BMSCs and the formation of adipocytes were evaluated using alkaline phosphatase staining and methylene blue staining method, respectively. Osteoporosis model was established in ovariectomized rats prior to the measurement of the serum SOD and MDA levels as well as the expression of inflammatory cytokines protein in the rats’ tissues after treatment with Baohuoside I using ELISA assay kits. The estrogen-like effect of Baohuoside I was also measured on HeLa cells. The positive rates of ALP staining in Baohuoside I groups were significantly higher (p < 0.01) compared with the normal group, with no obvious adipocyte formation observed in the groups that received Baohuoside I treatments. The levels of inflammatory markers (IL-1β, TNF-α, IL-6 and IL-8) in the treated groups were significantly lower (p < 0.05) than in the model group. Likewise, the treated groups exhibited a significantly higher (p < 0.05) serum levels of MDA compared with the model group, while SOD levels were markedly lower (p < 0.05) in a dose-dependent fashion. Baohuoside I showed no estrogen-like effect on HeLa cells upon treatment with the drug. Collectively, these results indicated that the anti-osteoporotic activity of Baohuoside I could be related to the induction of BMSCs differentiation into osteoblasts coupled with the inhibition of adipocyte formation, regulation of immune functions, and antioxidant activity.