Estrogen deficiency is one of the most frequent causes of osteoporosis in women and a possible cause of bone loss in men. But the mechanism involved remains largely unknown. Estrogen deficiency leads to an increase in the immune function, which culminates in an increased production of tumor necrosis factor (TNF) by activated T cells. TNF increases osteoclast formation and bone resorption both directly and by augmenting the sensitivity of maturing osteoclasts to the essential osteoclastogenic factor RANKL (the RANK ligand). Increased T cell production of TNF is induced by estrogen deficiency via a complex mechanism mediated by antigen presenting cells and the cytokines IFNγ, IL-7 and transforming growth factor-β. The experimental evidence that suggests that estrogen prevents bone loss by regulating T cell function and the interactions between immune cells and bone is reviewed here.