MicroRNAs (miRNAs) interfere with translation of specific target mRNAs and are thought to thereby regulate many cellular processes. Recent studies have suggested that miRNAs might play a role in osteoblast differentiation and bone formation. Here, we identify a new miRNA (miR-2861) in primary mouse osteoblasts that promotes osteoblast differentiation by repressing histone deacetylase 5 (HDAC5) expression at the post-transcriptional level. miR-2861 was found to be transcribed in ST2 stromal cells during bone morphogenetic protein 2-induced (BMP2-induced) osteogenesis, and overexpression of miR-2861 enhanced BMP2-induced osteoblastogenesis, whereas inhibition of miR-2861 expression attenuated it. HDAC5, an enhancer of runt-related transcription factor 2 (Runx2) degradation, was confirmed to be a target of miR-2861. In vivo silencing of miR-2861 in mice reduced Runx2 protein expression, inhibited bone formation, and decreased bone mass. Importantly, miR-2861 was found to be conserved in humans, and a homozygous mutation in pre-miR-2861 that blocked expression of miR-2861 was shown to cause primary osteoporosis in 2 related adolescents. Consistent with the mouse data, HDAC5 levels were increased and Runx2 levels decreased in bone samples from the 2 affected individuals. Thus, our studies show that miR-2861 plays an important physiological role in osteoblast differentiation and contributes to osteoporosis via its effect on osteoblasts.