Glucocorticoids are used widely in a range of medical specialities, but their main limitation is an adverse impact on bone. Although physicians are increasingly aware of these deleterious effects, the marked variation in susceptibility between individuals makes it difficult to predict who will develop skeletal complications with these drugs. Although the mechanisms underlying the adverse effects on bone remain unclear, the most important effect appears to be a rapid and substantial decrease in bone formation. This review will examine recent studies that quantify the risk of fracture with glucocorticoids, the mechanisms that underlie this increase in risk and the potential basis for differences in individual sensitivity. An important determinant of glucocorticoid sensitivity appears to be the presence of glucocorticoid-metabolizing enzymes within osteoblasts and this may enable improved estimates of risk and generate new approaches to the development of bone-sparing anti-inflammatory drugs.