Glucocorticoids (GCs) have potent immunomodulatory and anti-inflammatory effects and are widely used in the treatment of inflammatory diseases. Unfortunately, their long term administration causes serious systemic metabolic side effects including osteoporosis, muscle wasting and insulin resistance. 11β-hydroxysteroid dehydrogenase type 1 (11β-HSD1) is responsible for the local conversion of inactive GCs to their active counterparts. It has been shown that many of the metabolic side effects associated with GC excess are mediated by local reactivation by 11β-HSD1. We hypothesised that 11β-HSD1 within osteoblasts mediates the destructive effects of GCs on bone. Wild-type (WT) mice and transgenic mice lacking 11β-HSD1 (11βKO) were treated with the active GC corticosterone (CORT) (100 mg/ml) for 4 weeks. Tibia and humerus bones were excised post-mortem for micro-CT analysis and three point flexure strength tests, respectively. Micro-CT analysis of bone volume to tissue volume (BV/TV), trabecular thickness (TT) and trabecular number (TN) found no significant differences between untreated WT and 11βKO mice (BV/TV: WT 8.5%±0.66 vs 11βKO 7.5%±0.76, NS; TT: WT 96.5 μm±3.8 vs 11βKO 95.8 μm±6.4, NS; TN: WT 0.0009 1/μm±0.00004 vs 11βKO 0.0008 1/μm±0.00004, NS). Humerus bone strength (HBS) of WT and 11βKO animals also showed no significant differences (WT 51.2 MPa ±15.1 vs 11βKO 49.2 MPa ±4.9, NS). All bone parameters were decreased in CORT fed WT mice indicating the development of osteoporosis, whilst 11βKO mice were protected against many of the detrimental effects of CORT (BV/TV: WT 4.2%±0.38 vs 11βKO 7.2%±0.71, P≤0.05; TN: WT 0.0006 1/μm±0.00004 vs 11βKO 0.0009 1/μm±0.00008, P≤0.001; HBS: WT 27.1 MPa ±5.6 vs 11βKO ±50 MPa ±5.1, P≤0.05). These data suggest that local reactivation of GCs by 11β-HSD1 mediates the development of glucocorticoid-induced osteoporosis.