Multiple myeloma (MM) causes lytic bone lesions due to increased bone resorption and concomitant marked suppression of bone formation. Sclerostin (Scl), an osteocyte-derived inhibitor of Wnt/β-catenin signaling, is elevated in MM patient sera and increased in osteocytes in MM-bearing mice. We show here that genetic deletion of Sost, the gene encoding Scl, prevented MM-induced bone disease in an immune-deficient mouse model of early MM, and that administration of anti-Scl antibody (Scl-Ab) increased bone mass and decreases osteolysis in immune-competent mice with established MM. Sost/Scl inhibition increased osteoblast numbers, stimulated new bone formation and decreased osteoclast number in MM-colonized bone. Further, Sost/Scl inhibition did not affect tumor growth in vivo or anti-myeloma drug efficacy in vitro. These results identify the osteocyte as a major contributor to the deleterious effects of MM in bone and osteocyte-derived Scl as a promising target for the treatment of established MM-induced bone disease. Further, Scl did not interfere with efficacy of chemotherapy for MM, suggesting that combined treatment with anti-myeloma drugs and Scl-Ab should effectively control MM growth and bone disease, providing new avenues to effectively control MM and bone disease in patients with active MM.