This review summarizes the structure of periosteum in relation to clinical applications.. It shows the structure of periosteum as outer fibrous and inner osteogenic layers. Bone lining cells were used recently to describe inactive osteoblasts. The review also discussed the role of periostin protein, its higher concentration in periosteum than bone. Periostin is high early in fracture while decrease after stoppage of cellular differentiation so figure out the stem cell as the main source of periostin. Also in this review the structure of bone niche was described as formed of cellular part and non cellular part. Stem cell niche is very important to regulate stem cell division and direct differentiation to bone growth or bone healing and regeneration of damaged bone. This review also reported the blood supply of periosteum. Blood supply from periosteum is divided into four vascular systems. It sheds a light on morphology of osteoblasts and mechanism of mineralization. osteoblast has specific receptors in the cell membrane and contains a magic structure called matrix vesicle which plays the key role in bone mineralization. Moreover, the review discusses the role of periosteum in bone remodeling. Periosteal bone formation is described in different ages: fetal, childhood and adulthood. It also reported on osteoblastic activation of osteoclasts and its role in bone structure. The review explained the new term of bone remodeling unit which is formed of cutting cone and closing cone so confirm the importance of exercise for healthy bone formation. Factors affecting bone formation by periosteum were also categorized to hormonal, mechanical, environmental genetic and diseases. Healing of bone fracture is the most important one clinical application, but the review also contains many clinical applications related to the structure and function of periosteum.