The bone wasting induced by estrogen deficiency is, in part, a consequence of increased T cell production of the osteoclastogenic cytokine TNF-α. This phenomenon is due to an expansion of T cells, but the responsible mechanism is unknown. We now show that ovariectomy (ovx) disregulates T lymphopoiesis and induces bone loss by stimulating, through a rise in IL-7 levels, both thymic-dependent differentiation of bone marrow-derived progenitors and thymic-independent, peripheral expansion of mature T cells. Attesting to the relevance of the thymic effects, thymectomy decreases by ≈50% the bone loss and the stimulation of T lymphopoiesis induced by ovx. In contrast, in vivo attenuation of the elevated IL-7 completely prevents the stimulation of T lymphopoiesis and the bone loss that follow ovx. Thus, the disruption of both T cell and bone homeostasis induced by ovx is mediated by IL-7 and due to both the thymic and extrathymic mechanisms. We conclude that IL-7 is a pivotal upstream target through which estrogen regulates hematopoietic and immune functions that are critical for bone homeostasis.