Breast and prostate cancer are among the most common malignancies worldwide. After treatment of the primary tumor, distant metastases often occur after a long disease-free interval. Bone is a major site for breast and prostate cancer metastasis and approximately 70% of patients with advanced disese suffer from osteolytic or osteoblastic bone metastases, a stage at which the disease is incurable. In bone, the disseminated tumor cells (DTCs) can become quiescent or “dormant”, a state where they are alive but not actively dividing. Alternatively, the cancer cells can proliferate, disturb the bone homeostasis, and form metastatic lesions. The fate of cancer cells is largely dependent on the bone microenvironment, particularly the bone forming osteoblasts and bone resorbing osteoclasts. Osteoblasts originate from mesenchymal precursors through a tightly regulated cascade. The main function of osteoblasts is to synthesize bone matrix, coordinate mineralization and maintain bone remodeling by regulating osteoclast activity and bone resorption. In metastatic bone environment, osteoblasts can create a niche within the bone where DTCs cells become dormant and induce quiescence in cancer cells keeping them in a non-proliferative state. Osteoblasts also contribute to metastatic outgrowth and actively promote tumor growth in bone. In this article, we review the recent literature on the role of osteoblasts in cancer cell dormancy and bone metastasis and describe the underlying mechanisms by which osteoblasts regulate cancer cell fate in bone. In addition, we discuss the possibility of targeting osteoblasts to treat osteolytic bone metastases.