Bmp2 and Bmp4 genes were ablated in adult mice (KO) using a conditional gene knockout technology. Bones were evaluated by microcomputed tomography (μCT), bone strength tester, histomorphometry and serum biochemical markers of bone turnover. Drill-hole was made at femur metaphysis and bone regeneration in the hole site was measured by calcein binding and μCT. Mice were either sham operated (ovary intact) or ovariectomized (OVX), and treated with human parathyroid hormone (PTH), 17β-estradiol (E2) or vehicle. KO mice displayed trabecular bone loss, diminished osteoid formation and reduced biomechanical strength compared with control (expressing Bmp2 and Bmp4). Both osteoblast and osteoclast functions were impaired in KO mice. Bone histomorphomtery and serum parameters established a low turnover bone loss in KO mice. Bone regeneration at the drill-hole site in KO mice was lower than control. However, deletion of Bmp2 gene alone had no effect on skeleton, an outcome similar to that reported previously for deletion of Bmp4 gene. Both PTH and E2 resulted in skeletal preservation in control-OVX, whereas in KO-OVX, E2 but not PTH was effective which suggested that the skeletal action of PTH required Bmp ligands but E2 did not. To determine cellular effects of Bmp2 and Bmp4, we used bone marrow stromal cells in which PTH but not E2 stimulated both Bmp2 and Bmp4 synthesis leading to increased Smad1/5 phosphorylation. Taken together, we conclude that Bmp2 and Bmp4 are essential for maintaining adult skeletal homeostasis and mediating the anabolic action of PTH.