In cartilage and bone-producing cells, proliferation and growth are balanced with terminal differentiation. Maintaining this balance is essential for modeling, growth, and maintenance of the skeleton. Cartilage growth follows a program regulated by hormones and cytokines interacting with a counter-regulatory system in which hedgehog and parathyroid hormone (PTH)-rP signals are key elements. This maintains chondrocyte proliferation and, at specific sites, allows differentiation. Bone is produced by differentiation of mesenchymal stem cells on a scaffold of mineralizing cartilage. However, bone, once formed, is continually resorbed and replaced. Thus, maintenance of bone mass requires retention of stem cells and preosteoblasts in undifferentiated division-competent stages. Maintenance of the undifferentiated states is poorly understood, whereas the rate of osteoblast formation is regulated in part by PTH and insulin-like growth factor. The precursor pool is also subject to depletion by differentiation of mesenchymal stem cells to nonbone cells including adipocytes. In the aging skeleton, disordered balance between bone formation and resorption is in major part due to immune dysregulation that increases formation of bone-degrading osteoclasts; tumor necrosis factor (TNF)-alpha is a major intermediate in this process.