Transglutaminase 2 (TG2) is a multifunctional enzyme that exhibits transamidase, GTPase, kinase, and protein disulfide isomerase (PDI) activities. Of these, transamidase-mediated modification of proteins regulates apoptosis, differentiation, inflammation, and fibrosis. TG2 is highly expressed in mesenchymal stem cells (MSCs) compared with differentiated cells, suggesting a role of TG2 specific for MSC characteristics. In this study, we report a new function of TG2 in the regulation of MSC redox homeostasis. During in vitro MSC expansion, TG2 is required for cell proliferation and self-renewal by preventing premature senescence but has no effect on the expression of surface antigens and oxidative stress-induced cell death. Moreover, induction of differentiation upregulates TG2 that promotes osteoblastic differentiation. Molecular analyses revealed that TG2 mediates tert-butylhydroquinone, but not sulforaphane, -induced nuclear factor erythroid 2-related factor 2 (NRF2) activation in a transamidase activity-independent manner. Differences in the mechanism of action between two NRF2 activators suggest that PDI activity of TG2 may be implicated in the stabilization of NRF2. The role of TG2 in the regulation of antioxidant response was further supported by transcriptomic analysis of MSC. These results indicate that TG2 is a critical enzyme in eliciting antioxidant response in MSC through NRF2 activation, providing a target for optimizing MSC manufacturing processes to prevent premature senescence.