The mechanism of bone loss following cessation of ovarian function is still unclear. Several studies have shown an increase in bone turnover following natural or surgical menopause which could be prevented by estrogen administration. However, a direct effect of estrogen on osteoclast‐mediated bone resorption has been difficult to demonstrate in vitro. Recent evidence suggested that estrogen withdrawal stimulates the production of bone resorbing cytokines, (e.g., interleukin‐6, IL‐6), which regulate osteoclast formation in the bone marrow microenvironment. We studied the effects of 17β‐estradiol on osteoclastic resorption, measured as ⁴⁵calcium release, in vitro using cultures of fetal mouse long bone explants in which different stages of osteoclast development and activity are represented. 17β‐estradiol (10⁻¹²‐10⁻⁸ M) had no effect on basal or parathyroid hormone (PTH)‐stimulated resorption of bone explants in which mature osteoclasts (radii/ulnae) or osteoclast precursors/progenitors (metacarpals) are present. 17β‐estradiol, however, inhibited significantly the PTH‐stimulated resorption of osteoclast‐free metacarpals cultured together with mouse fetal liver as a source of early osteoclast progenitors; basal resorption was also not inhibited in this system. In ex vivo studies we further examined the effects of culturing bone marrow cells from ovariectomized (OVX) or sham‐operated mice as an osteoclastic source together with osteoclast‐free metacarpals on ⁴⁵calcium release and bone histology. Cocultures of the bone marrow cells from OVX mice with osteoclast‐free metacarpals increased significantly the osteoclast formation and subsequent osteoclastic resorption compared with control cocultures. This increase in resorption was prevented by either treatment of the OVX animals with estrogen for 1 week starting immediately after OVX or injection of the OVX animals with an IL‐6 neutralizing antibody. We conclude that estrogens suppress the increased osteoclastic resorption induced by PTH or OVX through an effect on hematopoietic progenitor cells of the osteoclast lineage. Furthermore our data suggest that IL‐6 is involved in the increase in osteoclastic resorption following OVX.