Dickkopf-related protein 1 (DKK1) is essential to maintain skeletal homeostasis as an inhibitor of Wnt signaling and osteogenic differentiation. The purpose of this study was to investigate the molecular mechanisms underlying the developmental stage-specific regulation of the DKK1 protein level. We performed a series of studies including luciferase reporter assays, micro-RNA microarray, site-specific mutations, and gain- and loss-of-function analyses. We found that the DKK1 protein level was regulated via DKK1 3' UTR by miRNA control, which was restricted to osteoblast-lineage cells. As a result of decreased DKK1 protein level by miR-335-5p, Wnt signaling was enhanced, as indicated by elevated GSK-3β phosphorylation and increased β-catenin transcriptional activity. The effects of miR-335-5p were reversed by anti-miR-335-5p treatment, which downregulated endogenous miR-335-5p. In vivo studies showed high expression levels of miR-335-5p in osteoblasts and hypertrophic chondrocytes of mouse embryos, indicating a pivotal role of miR-335-5p in regulating bone development. In conclusion, miR-335-5p activates Wnt signaling and promotes osteogenic differentiation by downregulating DKK1. This cell- and development-specific regulation is essential and mandatory for the initiation and progression of osteogenic differentiation. miR-335-5p proves to be a potential and useful targeting molecule for promoting bone formation and regeneration. Copyright © 2011 American Society for Bone and Mineral Research.