Estrogen is critical for skeletal homeostasis and regulates bone remodeling, in part, by modulating the expression of receptor activator of NF-κB ligand (RANKL), an essential cytokine for bone resorption by osteoclasts. RANKL can be produced by a variety of hematopoietic (e.g. T and B-cell) and mesenchymal (osteoblast lineage, chondrocyte) cell types. The cellular mechanisms by which estrogen acts on bone are still a matter of controversy. By using murine reconstitution models that allow for selective deletion of estrogen receptor-alpha (ERα) or selective inhibition of RANKL in hematopoietic vs. mesenchymal cells, in conjunction with in situ expression profiling in bone cells, we identified bone lining cells as important gatekeepers of estrogen-controlled bone resorption. Our data indicate that the increase in bone resorption observed in states of estrogen deficiency in mice is mainly caused by lack of ERα-mediated suppression of RANKL expression in bone lining cells.