Plasticity is the ability to give rise to cell types whose phenotype is different from that of the source tissue. Osteoblasts originate in progenitors located in the bone marrow or around blood vessels. Marrow stromal cells can differentiate into adipocytes, in part at the expense of osteoblasts. The osteoblast-adipocyte balance is influenced by systemic factors, chiefly hormones, and local factors in the microenvironment, as well as by mechanical loads, which induce or suppress the activity of transcription factors crucial to the differentiation of each cell type. New insights into the molecular mechanisms involved in controlling the osteoblast-adipocyte balance are unlocking doors to a vast array of innovative treatment strategies.