The bone marrow milieu comprised of both hematopoietic and non-hematopoietic lineages has a unique structural organization. Bone undergoes continuous remodeling in the body throughout life. This dynamic process involves a balance between bone-forming osteoblasts (OBs) derived from multipotent mesenchymal stem cells (MSCs) and bone-resorbing osteoclasts (OCs) derived from hematopoietic stem cells (HSCs). Src homology 2-domain-containing inositol 5′-phosphatase 1 (SHIP1) regulates cellular processes such as proliferation, differentiation, and survival via the PI3K/AKT signaling pathway initiated at the plasma membrane. SHIP1-deficient mice also exhibit profound osteoporosis that has been proposed to result from hyperresorptive activity by OCs. We have previously observed that SHIP1 is expressed in primary OBs, which display defective development in SHIP1-deficient mice. These findings led us to question whether SHIP1 plays a functional role in osteolineage development from MSC in vivo, which contributes to the osteoporotic phenotype in germline SHIP1 knockout mice. In this short review, we discuss our current understanding of inositol phospholipid signaling downstream of SHIP1 in bone biology.