Bone formation proceeds through a remodeling process that runs continuously, involving the resorption of old bone by osteoclasts, and the subsequent formation of new bone by osteoblasts. This is controlled by growth factors and cytokines produced in bone marrow microenvironment and by the action of systemic hormones, like parathyroid hormone, estradiol or growth hormone (GH). One candidate for hormonal modulation of osteoblast and osteoclast formation is melatonin. Because circulating melatonin declines with age, its possible involvement in post-menopausal and senescence osteoporosis is considered. This review article discusses early studies on melatonin-bone relationships and recent data that suggest a direct effect of melatonin on bone. Melatonin could act as an autacoid in bone cells as it is present in high quantities in bone marrow, where precursors of bone cells are located. Melatonin dose-dependently augmented proteins that are incorporated into the bone matrix, like procollagen type I c-peptide. Osteoprotegerin, an osteoblastic protein that inhibits the differentiation of osteoclasts is also augmented by melatonin in vitro. Another possible target cell for melatonin is the osteoclast, which degrades bone partly by generating free radicals. Melatonin through its free radical scavenger and antioxidant properties may impair osteoclast activity and bone resorption. At least in one study melatonin was both inhibitory to osteoclastic and osteoblastic cells. Therefore, the documented bone-protecting effect of melatonin in ovariectomized rats can depend in part on the free radical scavenging properties of melatonin. Additionally, melatonin may impair development of osteopenia associated with senescence by improving non-rapid eye movement sleep and restoring GH secretion. Whether melatonin can be used as a novel mode of therapy for augmenting bone mass in diseases deserves to be studied.