Postmenopausal bone loss stems from the inability of osteoblastic activity to match the increase in osteoclastic bone resorption induced by estrogen deficiency. However, the mechanism that uncouples osteoblast from osteoclast activities remains unexplained. We show that ovariectomy enhances the production of the osteoclastogenic cytokine IL-7, and that its neutralization in vivo prevents ovariectomy-induced bone loss. Surprisingly, serum osteocalcin levels, a biochemical marker of bone formation, suggested that the bone-sparing effects of IL-7 neutralization were due not only to inhibition of bone resorption, but also to stimulation of bone formation. Consistent with these data, addition of IL-7 to neonatal calvarial organ cultures blocked new bone formation, and injection of IL-7 into mice in vivo inhibited bone formation as measured by calcein incorporation into long bones. The antianabolic effects of IL-7 were consistent with an observed downregulation of the osteoblast-specific transcription factor core-binding factor α1/Runx2. Thus, because it targets both the osteoclast and the osteoblast pathways, IL-7 is central to the altered bone turnover characteristic of estrogen deficiency.