Mesenchymal cells are natural tissue builders. They exhibit an extraordinary capacity to metamorphize into differentiated cells, using extrinsic spatial and temporal inputs and intrinsic algorithms, as well as to build and adapt their own habitat. In addition to providing a habitat for osteoprogenitor cells, tissues of the skeletal system provide mechanical support and protection for the multiple organs of vertebrate organisms. This review examines the role of mechanics on determination of cell fate during pre-, peri- and postnatal development of the skeleton as well as during tissue genesis and repair in postnatal life. The role of cell mechanics is examined and brought into context of intrinsic cues during mesenchymal condensation. Remarkable new insights regarding structure function relationships in mesenchymal stem cells, and their influence on determination of cell fate are integrated in the context of de novo tissue generation and postnatal repair. Key differences in the formation of osteogenic and chondrogenic condensations are discussed in relation to direct intramembranous and indirect endochondral ossification. New approaches are discussed to elucidate and exploit extrinsic cues to generate tissues in the laboratory and in the clinic.