Mesenchymal stem cells (MSC) originate from bone marrow and give rise to various cell types, including osteoblasts, chondrocytes, adipocytes, and myocytes. Lineage-specific differentiation is dependent on activation of specific transcription factors. MSCs play an important role in bone modelling and remodelling where they give rise to the osteoblasts necessary for bone formation. Human studies have shown that the number and differentiation potential of MSC are unchanged with age and osteoporosis. In recent years, there has been an increasing interest in the clinical use of MSCs. These have been used to augment healing of bone fractures. Some animal studies have shown that MSCs infused intravenously target bone and possibly participate in bone formation. These studies represent the beginning of a new era, where transplantation with autologous MSCs or genetically-modified MSCs expanded in vitro is a potential treatment strategy to augment bone formation in patients with diverse metabolic and genetic bone diseases, including osteoporosis.