The mechanisms of cell differentiation in the skeleton are just beginning to be unraveled. In the past year classical gene expression studies, genetic manipulation in mice and human genetic approaches have led to the identification of Osf2/Cbfa1 as a major regulator of osteoblast differentiation. Important progress was also made in the understanding of the control of osteoclast differentiation through the identification of osteoprotegerin and its ligand. These studies, as well as others of chondrocyte differentiation, provide a better understanding of skeletogenesis.