Bone tissue arises from mesenchymal cells induced into the osteoblast lineage by essential transcription factors and signaling cascades. MicroRNAs regulate biological processes by binding to mRNA 3′-untranslated region (UTR) sequences to attenuate protein synthesis. Here we performed microRNA profiling and identified miRs that are up-regulated through stages of osteoblast differentiation. Among these are the miR-29, miR-let-7, and miR-26 families that target many collagens and extracellular matrix proteins. We find that miR-29b supports osteoblast differentiation through several mechanisms. miR-29b decreased and anti-miR-29b increased activity of COL1A1, COL5A3, and COL4A2 3′-UTR sequences in reporter assays, as well as endogenous gene expression. These results support a mechanism for regulating collagen protein accumulation during the mineralization stage when miR-29b reaches peak levels. We propose that this mechanism prevents fibrosis and facilitates mineral deposition. Our studies further demonstrate that miR-29b promotes osteogenesis by directly down-regulating known inhibitors of osteoblast differentiation, HDAC4, TGFβ3, ACVR2A, CTNNBIP1, and DUSP2 proteins through binding to target 3′-UTR sequences in their mRNAs. Thus, miR-29b is a key regulator of development of the osteoblast phenotype by targeting anti-osteogenic factors and modulating bone extracellular matrix proteins. © 2009 by The American Society for Biochemistry and Molecular Biology, Inc.