The endocannabinoid system has recently been shown to play a role in the regulation of bone metabolism. The type 2 cannabinoid receptor (CB2) has been reported to regulate bone mass, but conflicting results have been reported with regard to its effects on bone resorption and osteoclast function. Here we investigated the role that CB2 plays in regulating bone mass and osteoclast function using a combination of pharmacological and genetic approaches. The CB2-selective antagonist/inverse agonist AM630 inhibited osteoclast formation and activity in vitro, whereas the CB2-selective agonists JWH133 and HU308 stimulated osteoclast formation. Osteoclasts generated from CB2 knockout mice (CB2-/-) were resistant to the inhibitory effects of AM630 in vitro, consistent with a CB2-mediated effect. There was no significant difference in peak bone mass between CB2-/- mice and wild-type littermates, but after ovariectomy, bone was lost to a greater extent in wild-type compared with CB2-/- mice. Furthermore, AM630 protected against bone loss in wild-type mice, but the effect was blunted in CB2-/- mice. We conclude that CB2 regulates osteoclast formation and bone resorption in vitro and that under conditions of increased bone turnover, such as after ovariectomy, CB2 regulates bone loss. These observations indicate that CB2 regulates osteoclast formation and contributes to ovariectomy-induced bone loss and demonstrate that cannabinoid receptor antagonists/inverse agonists may be of value in the treatment of bone diseases characterized by increased osteoclast activity.