Placental-derived mesenchymal stem cells (pMSCs) are promising candidates for regenerative medicine because they possess high proliferative capacity and multi-differentiation potential. Human pMSCs are residing in an environment with low oxygen tension in the body. Heme oxygenase-1 (HO-1) is known to participate in the regulation of MSC differentiation. The present study aimed to investigate the impact of hypoxia on the osteogenic differentiation of human pMSCs, and to elucidate the role of HO-1 in the osteogenic differentiation of hypoxic pMSCs. Human pMSCs were cultured under normoxia (21% O₂) or hypoxia (5% O₂) for 3 days. We found that hypoxia maintained the morphology and immunophenotype of human pMSCs. The expression of stemness markers Oct4, Nanog, and Sox2 was increased under hypoxia. After a 5-day hypoxic culture, the proliferation ability of pMSCs was increased, which might be correlated with the increased expression of stem cell factor. During osteogenic induction, hypoxia increased the expression of osteogenic genes including osteopontin, osteocalcin, and alkaline phosphatase (ALP). Moreover, hypoxia increased the mineralization and ALP levels of human pMSCs as evidenced by Alizarin Red staining and ALP staining. Upregulation of HO-1 by cobalt-protoporphyrin treatment increased the osteogenic differentiation of pMSCs under hypoxia, while inhibition of HO-1 by Zn-protoporphyrin reduced the osteogenic differentiation of hypoxic pMSCs. Taken together, our data suggest that hypoxia can promote the osteogenic differentiation of human pMSCs. Upregulation of HO-1 can further increase the osteogenesis of human pMSCs under hypoxia. Our findings will highlight the therapeutic potential of MSCs in the tissue engineering of bones.