Insulin receptor substrates (IRS-1 and -2) are essential for intracellular signaling by insulin and IGF-I, anabolic regulators of bone metabolism. Mice lacking the IRS-1 gene IRS-1(-/-) showed severe osteopenia with low bone turnover. IRS-1 was expressed in osteoblasts, but not in osteoclasts, of wild-type (WT) mice. IRS-1(-/-) osteoblasts treated with insulin or IGF-I failed to induce tyrosine phosphorylation of cellular proteins, and they showed reduced proliferation and differentiation. Osteoclastogenesis in the coculture of hemopoietic cells and osteoblasts depended on IRS-1 expression in osteoblasts and could not be rescued by IRS-1 expression in hemopoietic cells in the presence of not only IGF-I but also 1,25(OH)(2)D(3). In addition, osteoclast differentiation factor (RANKL/ODF) was not induced by these factors in IRS-1(-/-) osteoblasts. We conclude that IRS-1 deficiency in osteoblasts impairs osteoblast proliferation, differentiation, and support of osteoclastogenesis, resulting in low-turnover osteopenia. Osteoblastic IRS-1 is essential for maintaining bone turnover, because it mediates signaling by IGF-I and insulin and, we propose, also by other factors, such as 1,25(OH)(2)D(3).