Declining estrogen levels during the first postmenopausal decade lead to rapid bone loss and increased fracture risk that can be reversed by estrogen replacement therapy. The bone-protective effects of estrogen may involve suppression of inflammatory cytokines that promote osteoclastogenesis and bone resorption, such as IL-1, TNF-α, and IL-6. We investigated whether estrogen modulates IL-1 actions on human osteoclasts (OCs) and other bone cell types. Isolated human OCs and primary bone marrow–derived OC-like cells expressed both the signaling (IL-1RI) and decoy (IL-1RII) IL-1 receptors, whereas only IL-1RI was detected in osteoblasts. IL-1RII/IL-1RI mRNA ratios and release of soluble IL-1RII (sIL-1RII) were lower in OC-like cells derived from women in the late postmenopausal period compared with younger women, but were unrelated to male donor age, suggesting that estrogen might play a role in regulating IL-1 receptor levels in vivo. Estrogen directly reduced in vitro OC-like cell IL-1RI mRNA levels while increasing IL-1RII mRNA levels and sIL-1RII release. These estrogenic events were associated with inhibited IL-1–mediated cytokine (IL-8) mRNA induction and cell survival, i.e., increased apoptosis. In contrast, estrogen did not alter IL-1R levels or IL-1 responsiveness in primary human osteoblasts or bone marrow stromal cells. We conclude that one novel mechanism by which estrogen exerts bone-protective effects may include a selective modulation of IL-1R isoform levels in OC or OC-like cells, thereby reducing their IL-1 responsiveness and cell survival. Conversely, this restraint on IL-1 actions may be lost as estrogen levels decline in aging women, contributing to an enhanced OC-mediated postmenopausal bone loss.