MicroRNAs (miRNAs) are a family of small, non-coding RNAs (17-24 nucleotides), which regulate gene expression either by the degradation of the target mRNAs or inhibiting the translation of genes. Recent studies have indicated that miRNA plays an important role in regulating osteoblast differentiation. In this study, we identified miR-203 and miR-320b as important miRNAs modulating osteoblast differentiation. We identified Dlx5 as potential common target by prediction algorithms and confirmed this by knock-down and over expression of the miRNAs and assessing Dlx5 at mRNA and protein levels and specificity was verified by luciferase reporter assays. We examined the effect of miR-203 and miR-320b on osteoblast differentiation by transfecting with pre- and anti-miRs. Over-expression of miR-203 and miR-320b inhibited osteoblast differentiation, whereas inhibition of miR-203 and miR-320b stimulated alkaline phosphatase activity and matrix mineralization. We show that miR-203 and miR-320b negatively regulate BMP-2-induced osteoblast differentiation by suppressing Dlx5, which in turn suppresses the downstream osteogenic master transcription factor Runx2 and Osx and together they suppress osteoblast differentiation. Taken together, we propose a role for miR-203 and miR-320b in modulating bone metabolism.