The form and pattern of the vertebrate skeleton is thought to be strongly influenced by several fundamental morphogenetic behaviours of mesenchymal cells during embryonic development. Recent genetic and developmental studies have identified some of the genes that play an important role in controlling both the aggregation of mesenchymal cells into rough outlines of future skeletal elements (condensations), and in controlling where skeletal precursors cleave or segment to produce separate skeletal elements connected by joints. Members of the bone morphogenetic protein (BMP) family appear to play an important role in both processes. Mouse and human mutations in these genes lead to defects in formation of specific bones and joints, with striking specificity for particular anatomical locations. Results from a range of experiments suggest that these molecules may have multiple functions during normal skeletal development and patterning. A major challenge for the future is to identify genes and pathways that can maintain, repair, or stimulate the regeneration of bone and joint structures at later developmental stages.