GATA4 is a transcription factor that regulates osteoblast differentiation. However, GATA4 is expressed at a higher level in mesenchymal stem cells (MSCs) than in osteoblasts. Therefore, the role of GATA4 in limb bud mesenchyme differentiation was investigated in mice by knocking out Gata4 using Cre-recombinase controlled by the Prx1 promoter (herein called Gata4 Prx-cKO mice). μCT analysis of the Gata4 Prx-cKO mice showed a decrease in trabecular bone properties compared with wildtype (Gata4^fl/fl) littermates. Gata4 Prx-cKO mice have fewer MSCs as measured by CFU-F assays, mesenchymal progenitor cells (MPC2) (flow cytometry of Sca1⁺/CD45^-/CD34^-/CD44^hi) and nestin immunofluorescence. Gata4 Prx-cKO bone marrow-derived MSCs have a significant reduction in WNT ligands, including WNT10B, and WNT signalosome components compared to control cells. Chromatin immunoprecipitation demonstrates that GATA4 is recruited to enhancers near Wnt3a, Wnt10b, Fzd6 and Dkk1. GATA4 also directly represses YAP in wildtype cells, and the absence of Gata4 leads to increased YAP expression. Together, we show that the decrease in MSCs is due to loss of Gata4 and a WNT10B-dependent positive autoregulatory loop. This leads to a concurrent increase of YAP and less activated β-catenin. These results explain the decreased trabecular bone in Gata4 Prx-cKO mice. We suggest that WNT signalosome activity in MSCs requires Gata4 and Wnt10b expression for lineage specification.