Extracellular regulation of signaling by transforming growth factor (TGF)–β family members is emerging as a key aspect of organ formation and tissue remodeling. In this study, we demonstrate that fibrillin-1 and -2, the structural components of extracellular microfibrils, differentially regulate TGF-β and bone morphogenetic protein (BMP) bioavailability in bone. Fibrillin-2–null (Fbn2^−/−) mice display a low bone mass phenotype that is associated with reduced bone formation in vivo and impaired osteoblast maturation in vitro. This Fbn2^−/− phenotype is accounted for by improper activation of latent TGF-β that selectively blunts expression of osterix, the transcriptional regulator of osteoblast maturation, and collagen I, the structural template for bone mineralization. Cultured osteoblasts from Fbn1^−/− mice exhibit improper latent TGF-β activation as well, but mature faster because of increased availability of otherwise matrix-bound BMPs. Additional in vitro evidence excludes a direct role of microfibrils in supporting mineral deposition. Together, these findings identify the extracellular microfibrils as critical regulators of bone formation through the modulation of endogenous TGF-β and BMP signaling.