Fat mass impacts on both bone turnover and bone density and is a critical risk factor for osteoporotic fractures. Adipocyte-derived hormones may contribute to this relationship, and adiponectin is a principal circulating adipokine. However, its effects on bone remain unclear. We have, therefore, investigated the direct effects of adiponectin on primary cultures of osteoblastic and osteoclastic cells in vitro and determined its integrated effects in vivo by characterizing the bone phenotype of adiponectin-deficient mice. Adiponectin was dose-dependently mitogenic to primary rat and human osteoblasts ( approximately 50% increase at 10 microg/ml) and markedly inhibited osteoclastogenesis at concentrations of 1 microg/ml or greater. It had no effect on osteoclastogenesis in RAW-264.7 cells or on bone resorption in isolated mature osteoclasts. In adiponectin knockout (AdKO) male C57BL/6J mice, trabecular bone volume and trabecular number (assessed by microcomputed tomography) were increased at 14 wk of age by 30% (P = 0.02) and 38% (P = 0.0009), respectively. Similar, nonsignificant trends were observed at 8 and 22 wk of age. Biomechanical testing showed lower bone fragility and reduced cortical hardness at 14 wk. We conclude that adiponectin stimulates osteoblast growth but inhibits osteoclastogenesis, probably via an effect on stromal cells. However, the AdKO mouse has increased bone mass, suggesting that adiponectin also has indirect effects on bone, possibly through modulating growth factor action or insulin sensitivity. Because adiponectin does influence bone mass in vivo, it is likely to be a contributor to the fat-bone relationship.