Estrogen is the major hormonal regulator of bone metabolism in women and men. Therefore, there is considerable interest in unraveling the pathways by which estrogen exerts its protective effects on bone. Although the major consequence of the loss of estrogen is an increase in bone resorption, estrogen deficiency is associated with a gap between bone resorption and formation, indicating that estrogen is also important for maintaining bone formation at the cellular level. Direct estrogen effects on osteocytes, osteoclasts, and osteoblasts lead to inhibition of bone remodeling, decreased bone resorption, and maintenance of bone formation, respectively. Estrogen also modulates osteoblast/osteocyte and T-cell regulation of osteoclasts. Unraveling these pleiotropic effects of estrogen may lead to new approaches to prevent and treat osteoporosis.