The role of the P2X7 receptor (P2X7R) is being explored with intensive interest in the context of normal bone physiology, bone-related diseases and, to an extent, bone cancer. In this review, we cover the current understanding of P2X7R regulation of bone cell formation, function and survival. We will discuss how the P2X7R drives lineage commitment of undifferentiated bone cell progenitors, the vital role of P2X7R activation in bone mineralisation and its relatively unexplored role in osteocyte function. We also review how P2X7R activation is imperative for osteoclast formation and its role in bone resorption via orchestrating osteoclast apoptosis. Variations in the gene for the P2X7R (P2RX7) have implications for P2X7R-mediated processes and we review the relevance of these genetic variations in bone physiology. Finally, we highlight how targeting P2X7R may have therapeutic potential in bone disease and cancer.