Thyroid hormone (T(3)) is essential for the normal development of endochondral and intramembranous bone and plays an important role in the linear growth and maintenance of bone mass. Childhood T(3) deficiency results in retardation of skeletal development and growth arrest, whereas T(3) excess leads to accelerated growth and bone formation. In adult thyrotoxicosis, there is increased bone remodelling, characterized by an imbalance between bone resorption and formation, which results in net bone loss and an increased risk for posteoporotic fracture. These clinical observations demonstrate the importance of T(3) in skeletal development and metabolism. Nevertheless, the molecular mechanisms of T(3) action in bone are poorly understood. Here, we provide an overview of T(3) regulation of chondrocytes, osteoblasts and osteoclasts, and the actions of thyroid hormone receptor (TR) isoforms in skeletal development. The possible roles of T(3) and TRs in nuclear receptor crosstalk, prereceptor ligand metabolism, heparan sulfate proteoglycan synthesis and angiogenesis are also considered.