Human mesenchymal stem cells (hMSCs) respond to mechanical stimuli, including stiffness and viscoelasticity. To date, it is unknown how extracellular fluid viscosity affects hMSC function on substrates of different stiffness and viscoelasticity. While hMSCs assume an adipogenic phenotype on gels of low stiffness and prescribed stress relaxation times, elevated fluid viscosity is sufficient to bias hMSCs toward an osteogenic phenotype. Elevated viscosity induces Arp2/3-dependent actin remodeling, enhances NHE1 activity, and promotes hMSC spreading via up-regulation of integrin-linked kinase. The resulting increase in membrane tension triggers the activation of transient receptor potential cation vanilloid 4 to facilitate calcium influx, thereby stimulating RhoA/ROCK and driving YAP-dependent RUNX2 translocation to the nucleus, leading to osteogenic differentiation. hMSCs on soft gels at elevated relative to basal viscosity favor an M2 macrophage phenotype. This study establishes fluid viscosity as a key physical cue that imprints osteogenic memory in hMSCs and promotes an immunosuppressive phenotype.