Osteonectin/SPARC is one of the most abundant noncollagenous extracellular matrix proteins in bone, regulating collagen fiber assembly and promoting osteoblast differentiation. Osteonectin-null and haploinsufficient mice have low-turnover osteopenia, indicating that osteonectin contributes to normal bone formation. In male idiopathic osteoporosis patients, osteonectin 3' untranslated region (UTR) single-nucleotide polymorphism (SNP) haplotypes that differed only at SNP1599 (rs1054204) were previously associated with bone mass. Haplotype A (containing SNP1599G) was more frequent in severely affected patients, whereas haplotype B (containing SNP1599C) was more frequent in less affected patients and healthy controls. We hypothesized that SNP1599 contributes to variability in bone mass by modulating osteonectin levels. Osteonectin 3' UTR reporter constructs demonstrated that haplotype A has a repressive effect on gene expression compared with B. We found that SNP1599G contributed to an miR-433 binding site, and miR-433 inhibitor relieved repression of the haplotype A, but not B, 3' UTR reporter construct. We tested our hypothesis in vivo, using a knock-in approach to replace the mouse osteonectin 3' UTR with human haplotype A or B 3' UTR. Compared with haplotype A mice, bone osteonectin levels were higher in haplotype B mice. B mice displayed higher bone formation rate and gained more trabecular bone with age. When parathyroid hormone was administered intermittently, haplotype B mice gained more cortical bone area than A mice. Cultured marrow stromal cells from B mice deposited more mineralized matrix and had higher osteocalcin mRNA compared with A mice, demonstrating a cell-autonomous effect on differentiation. Altogether, SNP1599 differentially regulates osteonectin expression and contributes to variability in bone mass, by a mechanism that may involve differential targeting by miR-433. This work validates the findings of the previous candidate gene study, and it assigns a physiological function to a common osteonectin allele, providing support for its role in the complex trait of skeletal phenotype. © 2014 American Society for Bone and Mineral Research.