Osteochondroprogenitors are crucial for embryonic bone development and postnatal processes such as bone repair in response to fracture injury, and their dysfunction may contribute to insufficient repair of structural damage in inflammatory arthritides. In the fracture healing, the early inflammatory phase is crucial for normal callus development and new bone formation. This process involves a complex interplay of many molecules and cell types, responsible for recruitment, expansion and differentiation of osteochondroprogenitor populations. In inflammatory arthritides, inflammation induces bone resorption and causes insufficient bone formation, which leads to local and systemic bone loss. While bone loss is a predominant feature in rheumatoid arthritis, inflammation also induces pathologic bone formation at enthesial sites in seronegative spondyloarthropathies. Bone morphogenetic proteins (BMP) are involved in cell proliferation, differentiation and apoptosis, and have fundamental roles in maintenance of postnatal bone homeostasis. They are crucial regulators of the osteochondroprogenitor pool and drive their proliferation, differentiation, and lifespan during bone regeneration. In this review, we summarize the effects of inflammation on osteochondroprogenitor populations during fracture repair and in inflammatory arthritides, with special focus on inflammation-mediated modulation of BMP signaling. We also present data in which we describe a population of murine synovial osteochondroprogenitor cells, which are reduced in arthritis, and characterize their expression of genes involved in regulation of bone homeostasis, emphasizing the up-regulation of BMP pathways in early progenitor subset. Based on the presented data, it may be concluded that during an inflammatory response, innate immune cells induce osteochondroprogenitors by providing signals for their recruitment, by producing BMPs and other osteogenic factors for paracrine effects, and by secreting inflammatory cytokines that may positively regulate osteogenic pathways. On the other hand, inflammatory cells may secrete cytokines that interfere with osteogenic pathways, proapoptotic factors that reduce the pool of osteochondroprogenitor cells, as well as BMP and Wnt antagonists. The net effect is strongly context-dependent and influenced by the local milieu of cells, cytokines, and growth factors. Further elucidation of the interplay between inflammatory signals and BMP-mediated bone formation may provide valuable tools for therapeutic targeting.