Bone organoids have emerged as powerful three-dimensional (3D) culture systems that recapitulate key aspects of bone physiology and pathology, offering superior translational relevance compared with traditional two-dimensional cultures and animal models. By integrating stem cell-derived lineages with biomimetic matrices that mimic the native extracellular matrix, bone organoids faithfully reproduce cellular heterogeneity, structural organization, and dynamic remodeling. Recent advances in natural and synthetic hydrogels, bioactive signaling, and diverse cell sources—including osteogenic, osteoclastic, hematopoietic, and adipogenic populations—have further enhanced organoid fidelity. Biofabrication strategies, such as scaffold-assisted assembly, 3D bioprinting, and organ-on-a-chip platforms enable spatial control and vascularization, while CRISPR-based gene editing and artificial intelligence-driven optimization offer unprecedented precision and scalability. The development of vascularized, innervated, and multi-system–integrated bone organoids holds great promise for disease modeling, drug screening, and regenerative therapies. This review outlines present strategies, technological advances, and future directions in bone organoid engineering.