The purpose of this study was to examine the effects of three doses (0.25, 0.5, and 1.0 mg/day) of micronized 17ss-estradiol on bone turnover, sex hormone levels, and side effects compared with placebo in healthy older women. The study design was randomized, double blind, and placebo controlled. The setting was a university clinical research center. Healthy, community-living women over 65 yr of age participated in the study. The main outcome measures were serum and urinary biochemical markers of bone resorption and formation at baseline, 6 and 12 weeks on treatment, and 6 and 12 weeks off treatment. Markers of bone resorption were N-telopeptides of type I collagen, C-telopeptides of type I collagen, and total deoxypyridinoline cross-links; formation markers were bone alkaline phosphatase, osteocalcin, and N-terminal procollagen peptides. We also measured serum estradiol, estrone, and sex hormone-binding globulin levels at baseline, 12 weeks on treatment, and 12 weeks posttreatment. All markers of bone resorption significantly decreased at 12 weeks on treatment compared with placebo and returned toward baseline at 12 weeks posttreatment. Two markers of bone formation, bone alkaline phosphatase and N-terminal procollagen peptides, significantly decreased 12 weeks posttreatment, but the decrease in osteocalcin varied with time and estrogen dose. Based on equivalence testing, the response of markers of bone turnover to therapy with 0.25 mg/day was similar to that seen with 1.0 mg/day. Serum estradiol increased compared with baseline in all treatment groups and compared with placebo in the two higher dose groups. Breast tenderness, bleeding, and endometrial changes were significantly less frequent in the 0.25 mg/day and placebo groups compared with the higher dose groups. We conclude that low dose of estrogen (0.25 mg/day 17ss-estradiol) reduced bone turnover to a similar degree as that seen with usual replacement therapy (1.0 mg/day 17ss-estradiol), but had a side effect profile similar to that of placebo. In our study additional increases in estradiol levels, as seen with 0.5 and 1.0 mg/day 17ss-estradiol treatment, resulted in more side effects without evidence of additional benefit to bone. These data suggest that 0.25 mg/day 17ss-estradiol may be an effective and tolerable agent for the treatment of osteoporosis in older women.