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Myostatin (GDF-8) is a member of the transforming growth factor-beta (TGF-beta) superfamily that is highly expressed in skeletal muscle, and myostatin loss-of-function leads to doubling of skeletal muscle mass. Myostatin-deficient mice have been used as a model for studying muscle-bone interactions, and here we review the skeletal phenotype associated with altered myostatin signaling. It is now known that myostatin is a key regulator of mesenchymal stem cell proliferation and differentiation, and mice lacking the myostatin gene show decreased body fat and a generalized increase in bone density and strength. The increase in bone density is observed in most anatomical regions, including the limbs, spine, and jaw, and myostatin inhibitors have been observed to significantly increase bone formation. Myostatin is also expressed in the early phases of fracture healing, and myostatin deficiency leads to increased fracture callus size and strength. Together, these data suggest that myostatin has direct effects on the proliferation and differentiation of osteoprogenitor cells, and that myostatin antagonists and inhibitors are likely to enhance both muscle mass and bone strength.