Both therapeutic glucocorticoids (GCs) and chronic inflammation are powerful inducers of systemic bone loss, resulting in osteoporosis and increased morbidity. Whilst GCs suppress inflammation, it is unclear how these factors interact to determine net bone metabolism. We investigated the balance between osteo-protective and osteo-destructive properties of GCs in the TNF-tg model of chronic inflammatory disease. Wild-type (WT) and TNF-tg mice were treated with corticosterone (100 mg/ml) for three weeks. Tibias were assessed by micro-CT and RT-PCR. Markers of bone metabolism were measured by serum ELISA. Corticosterone potently suppressed markers of inflammation and synovitis in TNF-tg mice. Whilst inflammation in the TNF-tg mouse resulted in a significant decrease in trabecular bone relative to WT animals, TNF-tg mice receiving corticosterone possessed a marked protection from inflammatory bone loss, with significantly greater BV/TV and Tb.N relative to untreated controls (BV/TV: TNF-tg 2.19%±0.2 vs TNF-tg CORT 4.25%±0.2, P≤0.001; Tb.N: TNF-tg 0.0004 1/μm±0.00009 vs TNF-tg CORT 0.0008 1/μm±0.00003, P≤0.001). Serum markers of bone resorption did not change across groups, however a significant reduction in juxta-articular osteoclasts was observed in TNF-tg mice receiving corticosterone relative to untreated controls. Although WT and TNF-tg mice receiving corticosterone did not develop a significant level of bone loss by micro-CT, we observed a significant reduction in mature osteoblast markers OSC and ALP and the serum marker of bone formation P1NP in both WT and TNF-tg animals receiving corticosterone relative to untreated controls, (WT 494.2 ng/ml ±61.1 vs WT CORT 31.4 ng/ml ±7.4, P≤0.001; TNF 269.7 ng/ml ±38.4 vs TNF-tg CORT 32.3 ng/ml ±4.2, P≤0.001). These data indicate that whilst therapeutic GCs suppress bone formation, they ultimately protect bone from inflammatory osteoporosis by suppressing osteoclast mediated bone resorption in vivo.