miR-196b-5p plays a role in various malignancies. We have recently reported its function in regulating adipogenesis. However, it remains to be clarified whether and how miR-196b-5p affects bone cells and bone homeostasis. In this study, in vitro functional experiments showed an inhibitory effect of miR-196b-5p on osteoblast differentiation. Mechanistic explorations revealed that miR-196b-5p directly targeted semaphorin 3a (Sema3a) and inhibited Wnt/β-catenin signaling. SEMA3A attenuated the impaired osteogenesis induced by miR-196b-5p. Osteoblast-specific miR-196b transgenic mice showed significant reduction of bone mass. Trabecular osteoblasts were reduced and bone formation was suppressed, whereas osteoclasts, marrow adipocytes, and serum levels of bone resorption markers were increased in the transgenic mice. The osteoblastic progenitor cells from the transgenic mice had decreased SEMA3A levels and exhibited retarded osteogenic differentiation, whereas those marrow osteoclastic progenitors exhibited enhanced osteoclastogenic differentiation. miR-196b-5p and SEMA3A oppositely regulated the expression of receptor activator of nuclear factor-κB ligand and osteoprotegerin. The calvarial osteoblastic cells expressing the transgene promoted osteoclastogenesis, whereas the osteoblasts overexpressing Sema3a inhibited it. Finally, in vivo transfection of miR-196b-5p inhibitor to the marrow reduced ovariectomy-induced bone loss in mice. Our study has identified that miR-196b-5p plays a key role in osteoblast and osteoclast differentiation and regulates bone homeostasis. Inhibition of miR-196b-5p may be beneficial for amelioration of osteoporosis.