Evolutionarily conserved Notch signaling plays a critical role during embryonic and postnatal life. The importance of Notch signaling in the determination of cell fate, and the spatio-temporal regulation of proliferation, differentiation and apoptosis has been demonstrated in various different organ systems. However, how Notch signaling affects the bone development was unknown until now. The in vivo effects of Notch signaling in lineage commitment, bone formation and bone resorption were demonstrated in recent studies. In addition to regulation of osteoblastogenesis, osteoblast directed osteoclastogenesis by Notch signaling revealed a dimorphic effect for this signaling pathway providing another example of such in bone development. Moreover, identification of the cross talk between the hematopoietic stem cell niche and osteoblasts through Notch signaling also suggested another important role for Notch signaling, i.e., the coupling of cellular components of the bone microenvironment. The association between the gain and loss of function of Notch activity in bone pathology highlights Notch as a potentially novel therapeutic target for the treatment of metabolic bone disease and bone cancer. In this review, we will focus primarily on the regulation of bone cells, i.e., osteoblasts and osteoclasts by Notch signaling. We will also review the importance of Notch in specifying bone–hematopoietic stem cell niche interactions within the bone microenvironment. Finally, we will discuss potential clinical implications and future directions for this field.