Skeletal dysplasias are common disabling disorders characterized by aberrant growth of bone and cartilage leading to abnormal skeletal structures and functions, often attributable to defects in skeletal progenitor cells. The underlying molecular and cellular mechanisms of most skeletal dysplasias remain elusive. Although the Wnt/β-catenin signaling pathway is required for skeletal progenitor cells to differentiate along the osteoblastic lineage, inappropriately elevated levels of signaling can also inhibit bone formation by suppressing osteoblast maturation. Here, we investigate interactions of the four major Gα protein families (Gα(s), Gα(i/o), Gα(q/11), and Gα(12/13)) with the Wnt/β-catenin signaling pathway and identify a causative role of Wnt/β-catenin signaling in fibrous dysplasia (FD) of bone, a disease that exhibits abnormal differentiation of skeletal progenitor cells. The activating Gα(s) mutations that cause FD potentiated Wnt/β-catenin signaling, and removal of Gα(s) led to reduced Wnt/β-catenin signaling and decreased bone formation. We further show that activation of Wnt/β-catenin signaling in osteoblast progenitors results in an FD-like phenotype and reduction of β-catenin levels rescued differentiation defects of FD patient-derived stromal cells. Gα proteins may act at the level of β-catenin destruction complex assembly by binding Axin. Our results indicate that activated Gα proteins differentially regulate Wnt/β-catenin signaling but, importantly, are not required core components of Wnt/β-catenin signaling. Our data suggest that activated Gα proteins are playing physiologically significant roles during both skeletal development and disease by modulating Wnt/β-catenin signaling strength.