This study was undertaken to examine the separate and combined effects of tamoxifen (T), estrogen (E2) and progesterone (P) treatment on ovariectomized (Ooph) rats. The animals were treated for 40 days. Ovariectomy reduced cancellous bone volume at the proximal tibia by 50%. Estradiol treatment completely prevented the bone loss and further increased bone volume 77% over the level for the control group. Tamoxifen also prevented the ovariectomy induced bone loss, but significantly reduced the increase in cancellous bone induced by estradiol. In the ovariectomized rats, cancellous bone apposition rate increased 23%. This increase was suppressed 63% by estradiol, and only 18% by tamoxifen. Tamoxifen significantly suppressed the inhibitory effect of estradiol on cancellous bone apposition rate. In contrast, the effect of progesterone treatment was only marginal. Our findings indicate that the action of tamoxifen on bone is influenced by the ambient level of circulating estradiol, such that in estrogen deficiency, tamoxifen has a weak estrogen agonist action on bone, and in the presence of estrogen it has anti-estrogen actions, with the dose level and mode of administration employed. These conclusions have implications for the use of tamoxifen in the treatment of pre- and postmenopausal women.