The skeleton originates from stem cells residing in the sclerotome and neural crest that undergo proliferation, migration, and commitment. The development of the skeletal stem cells is influenced by many signaling pathways that govern cell fate determination, proliferation, differentiation, and apoptosis. This review will focus on Notch signaling functions in regulating the different cell types that form the skeletal system as well as the interplay between them to maintain homeostasis. Osteochondroprogenitors require Notch signaling to maintain multipotency and to prevent premature differentiation into osteoblasts. Subsequently, overactivation of Notch signaling suppresses osteoblast maturation. Moreover, Notch signaling in osteochondroprogenitors is required for chondrocyte proliferation and hypertrophy and suppresses terminal differentiation. Translational studies demonstrated a crucial role of Notch signaling in osteosarcoma and osteoarthritis, where concepts derived from developmental pathways are often recapitulated. This brings hope of taking advantage of the molecular mechanisms learned from development to approach the pathological processes underlying abnormal bone/cartilage metabolism or tumorigenesis. Pharmacological agents that target Notch receptors or ligands in a tissue-specific fashion would offer new opportunities for treating bone/cartilage diseases caused by dysregulation of Notch signaling.