Central nervous system anomalies give rise to neuropathological consequences with immense damage to the neuronal tissues. Cell based therapeutics have the potential to manage several neuropathologies whereby the differentiated cells are explored for neuronal regeneration. The current study analyzes the effect of a bioactive compound, alpha terpineol (AT) on the differentiation of rat bone marrow derived mesenchymal stem cells (BM-MSCs) toward neuronal lineage, and explores regulation of differentiation process through the study of Wnt pathway mediators. BM-MSCs were cultured and characterized based on their surface markers and tri-lineage differentiation. Safe dose of AT as optimized by 3-(4,5-Dimethylthiazol-2-yl)-2,5-Diphenyltetrazolium bromide assay, was used for the treatment of MSCs. Treated cells were analyzed for the neuronal, astroglial and germ layer transition markers at the gene and protein levels, by quantitative polymerase chain reaction and immunocytochemistry, respectively. Temporal expression of Wnt pathway genes was assessed during the course of neuronal differentiation. AT treated group showed significant upregulation of neuron specific (NSE, MAP2, Tau, Nestin, and NefL) and astroglial (GFAP) genes with positive expression of late neuronal markers. Germ layer transition analysis showed the overexpression of ectodermal markers (NCAM, Nestin, and Pax6), whereas endodermal (AFP, MixL1, and Sox17), and mesodermal (Mesp1 and T Brachyury) markers were also found to be upregulated. Wnt signaling pathway was activated during the initial phase (30 min) of differentiation, which later was downregulated at 1, 3, and 5 h. AT efficiently induces neuronal differentiation of BM-MSCs by regulating Wnt signaling. Overexpression of both early and late neuronal markers indicate their neuro-progenitor state and thus can be utilized as a promising approach in cellular therapeutics to treat various neurodegenerative ailments. In addition, exploration of the molecular pathways may be helpful to understand the mechanism of cell-based neuronal regeneration.