Osteoblasts are specialized mesenchyme-derived cells accountable for bone synthesis, remodelling and healing. Differentiation of osteoblasts from mesenchymal stem cells (MSC) towards osteocytes is a multi-step process strictly controlled by various genes, transcription factors and signalling proteins. The aim of this review is to provide an update on the nature of bone-forming osteoblastic cells, highlighting recent data on MSC-osteoblast-osteocyte transformation from a molecular perspective and to discuss osteoblast malfunctions in various bone diseases. We present here the consecutive stages occurring in the differentiation of osteoblasts from MSC, the transcription factors involved and the role of miRNAs in the process. Recent data concerning the pathogenic mechanisms underlying the loss of bone mass and architecture caused by malfunctions in the synthetic activity and metabolism of osteoblasts in osteoporosis, osteogenesis imperfecta, osteoarthritis and rheumatoid arthritis are discussed. The newly acquired knowledge of the ontogeny of osteoblasts will assist in unravelling the abnormalities taking place during their differentiation and will facilitate the prevention and/or treatment of bone diseases by therapy directed against altered molecules and mechanisms.