Abstract: Bone Marrow Mesenchymal Stem Cells (BMMSCs) are a group of non-hematopoietic cells residing within the bone marrow. These are adhesive cells which can differentiate into osteogenic, adipogenic and chondrogenic lineages under appropriate conditions, results in maintaining the homeostasis mechanism. Though extracellular matrix is meant only for MSCs cell adhesion, it has some role in the lineage change. Apart from the extracellular matrix, growth factors play a pivotal role in the morphogenesis. In this review, we discuss the characteristics of BMMSCs, their differentiation potential toward different skeletal tissues (cartilage and bone) and bone tissue engineering and its need.