We studied molecular mechanism of Cistanches Herba aqueous extract (CHAE) in ovariectomized (OVX) rats, as an experimental model of postmenopausal osteoporosis. Female rats were either sham-operated or bilaterally OVX; and at 60 days postoperatively. The OVX group (n = 8) received an ovariectomy and treatment with normal saline for 90 days commencing from 20th post ovariectomy day. The ovariectomized +CHAE (OVX + CHAE) group (n = 8) received an ovariectomy and were treated with Cistanches Herba aqueous extract of 100 mg/kg body weight daily for 90 days commencing from 22nd post ovariectomy day. The ovariectomy +CHAE (OVX + CHAE) group (n = 8) received an ovariectomy, and were treated with the of 200 mg/kg body weight daily for 90 days commencing from 20th post ovariectomy day. Serum BGP and TRAP, E2, FSH and LH level, bone marrow Smad1, Smad5, TGF-β1 and TIEG1 mRNA expression levels were examined. Results showed that serum BGP and TRAP, FSH and LH levels were significantly increased, whereas E2, Smad1, Smad5, TGF-β1 and TIEG1 mRNA and proteins expression levels were significantly decreased in OVX rats compared to sham rats. 90 days of CHAE treatment could significantly decrease serum BGP and TRAP, FSH and LH levels, and increase E2, Smad1, Smad5, TGF-β1 and TIEG1 mRNA and proteins expression levels in OVX rats. It can be concluded that CHAE play its protective effect against OVX-induced bone degeneration partly by regulating some bone metabolism related genes, e.g. Smad1, Smad5, TGF-β1 and TIEG1.