Thiazolidinediones (TZDs) increase peripheral tissue insulin sensitivity in patients with type 2 diabetes mellitus by activating the nuclear receptor peroxisome proliferator-activated receptor gamma (PPARgamma). In bone marrow stromal cell cultures and in vivo, activation of PPARgamma by high doses (20 mg/kg/day) of TZDs has been reported to alter stem cell differentiation by promoting commitment of progenitor cells to the adipocytic lineage while inhibiting osteoblastogenesis. Here, we have examined the in vivo effects of low-dose rosiglitazone (3 mg/kg/day) on bone, administered to mice by gavage for 90 days. Rosiglitazone-treated mice had increased weight when compared with controls, with no significant alterations in serum levels of glucose, calcium or parathyroid hormone (PTH). Bone mineral density (BMD) at the lumbar vertebrae (L1-L4), ilium/sacrum, and total body was diminished by rosiglitazone treatment. Histologically, bone was characterized by decreased trabecular bone volume and increased marrow space with no significant change in bone marrow adipocity. Decreased osteoblast number and activity due to increased apoptotic death of osteoblasts and osteocytes was apparent while osteoclast parameters and serum levels of osteocalcin, alkaline phosphatase activity, and leptin were unaltered by rosiglitazone treatment. Therefore, the imbalance in bone remodeling that follows rosiglitazone administration arises from increased apoptotic death of osteogenic cells and diminished bone formation leading to the observed decrease in trabecular bone volume and BMD. These novel in vivo effects of TZDs on bone are of clinical relevance as patients with type 2 diabetes mellitus and other insulin resistant states treated with these agents may potentially be at increased risk of osteoporosis.