Fibrous dysplasia (FD) is the most serious and least understood clinical expression in patients with activating mutations of the GNAS gene. Since the discovery of the causative mutation, important progress has been made in the understanding of the pathology of FD and the pathogenesis of bone lesions. The histology of FD has been reinterpreted in light of the pathological effect of the genetic lesions on mutated skeletal stem cells. True histological hallmarks of the disease have emerged, along with genetic analysis, as additional tools to establish the correct diagnosis. Furthermore, the recognition of FD as a disease of excess, abnormal and imperfect bone formation has helped to explain relevant mechanisms of its clinical morbidity, based on which potential specific therapeutic approaches may be developed in the near future.