It is now well acknowledged that the immune and skeletal systems interact and affect one another during developmental physiology and pathology. With the aid of modern conditional gene targeting and transgenic technologies, this field of interdisciplinary research, known as osteoimmunology, is rapidly advancing. Numerous bone phenotypes have been described in immune-compromised gene-deficient mice and, albeit to a lesser extent, immune deficiencies exist in osteo-compromised gene-deficient mice, suggesting that bone cells themselves actually regulate the development of immune cells directly. In this review, I discuss the essential role of key cytokines, signalling transduction pathways and transcription factors during immune and bone development, and how pathology driven dysregulation of these shared mechanisms can lead to clinical manifestations. Diseases that are within the remit of osteoimmunology continue to cause significant morbidity, for example, rheumatoid arthritis, osteoporosis, multiple myeloma and breast/prostate cancer. The complexity and overlapping cellular and molecular interactions between the immune and bone tissues, mean that despite fervent research of these diseases, it remains a major challenge to discover therapeutics that can specifically target one system without detrimentally affecting the other.