Activating mutations of the GNAS gene, which causes fibrous dysplasia of bone (FD), lead to remarkable changes in the properties of skeletal progenitors, and it is these changes that mediate the pathological effect of this gene on bone. Mutated skeletal stem cells lose the ability to differentiate into adipocytes, and to maintain in situ, and transfer heterotopically, the hematopoietic microenvironment, leading to abnormal bone marrow histology in FD. They overexpress molecular effectors of osteoclastogenesis, thus promoting inappropriate bone resorption leading to fragility of FD bone. They express the phosphate-regulating hormone FGF-23 at normal levels, whose excess in the serum of FD patients correlates with the mass of osteogenic cells within FD lesions, leading to osteomalacia and deformity of the FD bone, and revealing that bone is an endocrine organ regulating renal handling of phosphate. Mechanisms of allelic selection and stem cell selection occur in mutated skeletal stem cells and contribute to the inherent diversity and evolution over time in FD. The definition of the etiological role of GNAS mutations marks the watershed between many decades of descriptive observation and the definition of cellular and molecular mechanisms that would explain and hopefully allow for a cure for the disease. Placing stem cells at center stage has permitted substantial advances in one decade, and promises more for the one to come.