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Here, we report on the development of a cost-effective, well-characterized three-dimensional (3D) model of bone homeostasis derived from commonly available stocks of immortalized murine cell lines and laboratory reagents. This 3D murine-cell-derived bone organoid model (3D-mcBOM) is adaptable to a range of contexts and can be used in conjunction with surrogates of osteoblast and osteoclast function to study cellular and molecular mechanisms that affect bone homeostasis in vitro or to augment in vivo models of physiology or disease. The 3D-mcBOM was established using a pre-osteoblast murine cell line, which was seeded into a hydrogel extracellular matrix (ECM) and differentiated into functional osteoblasts (OBs). The OBs mineralized the hydrogel ECM, leading to the deposition and consolidation of hydroxyapatite into bone-like organoids. Fourier-transform infrared (FTIR) spectroscopy confirmed that the mineralized matrix formed in the 3D-mcBOM was bone. The histological staining of 3D-mcBOM samples indicated a consistent rate of ECM mineralization. Type I collagen C-telopeptide (CTX1) analysis was used to evaluate the dynamics of OC differentiation and activity. Reliable 3D models of bone formation and homeostasis align with current ethical trends to reduce the use of animal models. This functional model of bone homeostasis provides a cost-effective model system using immortalized cell lines and easily procured supplemental compounds, which can be assessed by measuring surrogates of OB and OC function to study the effects of various stimuli in future experimental evaluations of bone homeostasis.