The skeleton is an exquisitely sensitive and archetypal T3-target tissue that demonstrates the critical role for thyroid hormones during development, linear growth, and adult bone turnover and maintenance. Thyrotoxicosis is an established cause of secondary osteoporosis, and abnormal thyroid hormone signaling has recently been identified as a novel risk factor for osteoarthritis. Skeletal phenotypes in genetically modified mice have faithfully reproduced genetic disorders in humans, revealing the complex physiological relationship between centrally regulated thyroid status and the peripheral actions of thyroid hormones. Studies in mutant mice also established the paradigm that T3 exerts anabolic actions during growth and catabolic effects on adult bone. Thus, the skeleton represents an ideal physiological system in which to characterize thyroid hormone transport, metabolism, and action during development, adulthood and in response to injury. Future analysis of T3 action in individual skeletal cell lineages will provide new insights into cell-specific molecular mechanisms and may ultimately identify novel therapeutic targets for chronic degenerative diseases such as osteoporosis and osteoarthritis. This review provides a comprehensive analysis of the current state-of-the-art.