Clinical data show that estrogen levels are inversely associated with the production of sclerostin, a Wnt antagonist that recently attracted great attention over the use of its antibody in the anabolic treatment of osteoporotic conditions. However, the molecular link between sclerostin expression and estrogen signaling is not yet known. We investigated the mechanisms by which estrogen modulates sclerostin (SOST) gene expression at the cellular level in human osteoblast cells in association with bone morphogenetic protein (BMP)2 signaling given that BMP2 is a potential inducer of SOST in human mesenchymal stromal cells (hMSCs). 17β-Estradiol (E2) alone had no effect on SOST expression, which was significantly induced by treatment with BMP2 in hMSCs and osteoblasts derived from the mandibles of female donors. However, E2 suppressed the induction of SOST and other BMP2 target genes by BMP2 in hMSCs. E2 signaling was independent of the Smad pathway, which plays a critical role in SOST induction mediated by BMP2. Instead, E2 increased the transcriptional expression of β-catenin and levels of its activated form. Silencing of the gene encoding estrogen receptor (ER)α decreased E2 activity in β-catenin activation and the suppression of SOST induction by BMP2, but had no influence on BMP2-mediated SOST induction in the same conditions. Similar results were obtained after treatment with ERα antagonist as a Wnt inhibitor. In human osteoblasts, the effect of E2 on SOST expression was either suppressive or absent, depending on the cell donor. Interestingly, the SOST expression pattern after treatment with BMP2 or BMP2/E2 in human osteoblasts showing a pattern of E2 suppression on SOST induction by BMP2 correlated with the ratio of receptor activator of nuclear factor kappa-B ligand (RANKL) to osteoprotegerin (OPG) expression. These results demonstrate that estrogen signaling in osteoblasts negatively regulates SOST expression in an indirect manner through interaction with BMP2 signaling and that this regulation involves the Wnt/ERα and β-catenin pathways. This study highlights several interactions between estrogen and BMP cascades in osteoblasts that may provide a basis for therapeutic intervention for the modification of bone mass density.