Estrogen receptor-α (ERα) acts primarily in the nucleus as a transcription factor involving two activation functions, AF1 and AF2, but it can also induce membrane-initiated steroid signaling (MISS) through the modulation of various kinase activities and/or secondary messenger levels. Previous work has demonstrated that nuclear ERα is required for the protective effect of the estrogen 17β-estradiol (E2), whereas the selective activation of ERαMISS is sufficient to confer protection in cortical but not cancellous bone. The aim of this study was to define whether ERαMISS is necessary for the beneficial actions of chronic E2 exposure on bone. We used a mouse model in which ERα membrane localization had been abrogated due to a point mutation of the palmitoylation site of ERα (ERα-C451A). Alterations of the sex hormones in ERα-C451A precluded the interpretation of bone parameters that were thus analyzed on ovariectomized and supplemented or not with E2 (8 μg/kg/d) to circumvent this bias. We found the beneficial action of E2 on femoral bone mineral density as well as in both cortical and cancellous bone was decreased in ERα-C451A mice compared with their wild-type littermates. Histological and biochemical approaches concurred with the results from bone marrow chimeras to demonstrate that ERαMISS signaling affects the osteoblast but not the osteoclast lineage in response to E2. Thus, in contrast to the uterine and endothelial effects of E2 that are specifically mediated by nuclear ERα and ERαMISS effects, respectively, bone protection is dependent on both, underlining the exquisite tissue-specific actions and interactions of membrane and nuclear ERα.