The effects of estrogen on bone are mediated mainly via estrogen receptor (ER)α. ERα in osteoclasts (hematopoietic origin) is involved in the trabecular bone-sparing effects of estrogen, but conflicting data are reported on the role of ERα in osteoblast lineage cells (nonhematopoietic origin) for bone metabolism. Because Cre-mediated cell-specific gene inactivation used in previous studies might be confounded by nonspecific and/or incomplete cell-specific ERα deletion, we herein used an alternative approach to determine the relative importance of ERα in hematopoietic (HC) and nonhematopoietic cells (NHC) for bone mass. Chimeric mice with selective inactivation of ERα in HC or NHC were created by bone marrow transplantations of wild-type (WT) and ERα-knockout (ERα^−/−) mice. Estradiol treatment increased both trabecular and cortical bone mass in ovariectomized WT/WT (defined as recipient/donor) and WT/ERα^−/−mice but not in ERα^−/−/WT or ERα^−/−/ERα^−/−mice. However, estradiol effects on both bone compartments were reduced (∼50%) in WT/ERα^−/−mice compared with WT/WT mice. The effects of estradiol on fat mass and B lymphopoiesis required ERα specifically in NHC and HC, respectively. In conclusion, ERα in NHC is required for the effects of estrogen on both trabecular and cortical bone, but these effects are enhanced by ERα in HC.