During bone marrow stromal cell (BMSC) differentiation, both Wnt signaling and the development of a rigid cytoskeleton promote commitment to the osteoblastic over adipogenic lineage. β‐catenin plays a critical role in the Wnt signaling pathway to facilitate downstream effects on gene expression. We show that β‐catenin was additive with cytoskeletal signals to prevent adipogenesis, and β‐catenin knockdown promoted adipogenesis even when the actin cytoskeleton was depolymerized. β‐catenin also prevented osteoblast commitment in a cytoskeletal‐independent manner, with β‐catenin knockdown enhancing lineage commitment. Chromatin immunoprecipitation (ChIP)‐sequencing demonstrated binding of β‐catenin to the promoter of enhancer of zeste homolog 2 (EZH2), a key component of the polycomb repressive complex 2 (PRC2) complex that catalyzes histone methylation. Knockdown of β‐catenin reduced EZH2 protein levels and decreased methylated histone 3 (H3K27me3) at osteogenic loci. Further, when EZH2 was inhibited, β‐catenin's anti‐differentiation effects were lost. These results indicate that regulating EZH2 activity is key to β‐catenin's effects on BMSCs to preserve multipotentiality.