During skeletal development, mesenchymal progenitor cells undergo a multistage differentiation process in which they proliferate and become bone- and cartilage-forming cells. This process is tightly regulated by multiple levels of regulatory systems. The small non-coding RNAs, microRNAs (miRNAs), post-transcriptionally regulate gene expression. Recent studies have demonstrated that miRNAs play significant roles in all stages of bone formation, suggesting the possibility that miRNAs can be novel therapeutic targets for skeletal diseases. Here, we review the role and mechanism of action of miRNAs in bone formation. We discuss roles of specific miRNAs in major types of bone cells, osteoblasts, chondrocytes, osteoclasts, and their progenitors. Except a few, the current knowledge about miRNAs in bone formation has been obtained mainly by in vitro studies; further validation of these findings in vivo is awaited. We also discuss about several miRNAs of particular interest in the light of future therapies of bone diseases.