An accurate diagnosis of bone tumours on imaging is crucial for appropriate and successful treatment. The advent of Artificial intelligence (AI) and machine learning methods to characterize and assess bone tumours on various imaging modalities may assist in the diagnostic workflow. The purpose of this review article is to summarise the most recent evidence for AI techniques using imaging for differentiating benign from malignant lesions, the characterization of various malignant bone lesions, and their potential clinical application. A systematic search through electronic databases (PubMed, MEDLINE, Web of Science, and clinicaltrials.gov) was conducted according to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. A total of 34 articles were retrieved from the databases and the key findings were compiled and summarised. A total of 34 articles reported the use of AI techniques to distinguish between benign vs. malignant bone lesions, of which 12 (35.3%) focused on radiographs, 12 (35.3%) on MRI, 5 (14.7%) on CT and 5 (14.7%) on PET/CT. The overall reported accuracy, sensitivity, and specificity of AI in distinguishing between benign vs. malignant bone lesions ranges from 0.44–0.99, 0.63–1.00, and 0.73–0.96, respectively, with AUCs of 0.73–0.96. In conclusion, the use of AI to discriminate bone lesions on imaging has achieved a relatively good performance in various imaging modalities, with high sensitivity, specificity, and accuracy for distinguishing between benign vs. malignant lesions in several cohort studies. However, further research is necessary to test the clinical performance of these algorithms before they can be facilitated and integrated into routine clinical practice.