AbstractOsteoblasts play an important role in the regulation of bone homeostasis throughout life. Thus, the damage of osteoblasts can lead to serious skeletal diseases, highlighting the urgent need for novel pharmacological targets. This study introduces chemical genetics strategy by using small molecule forskolin (FSK) as a probe to explore the druggable targets for osteoporosis. Here, this work reveals that transglutaminase 2 (TGM2) served as a major cellular target of FSK to obviously induce osteoblast differentiation. Then, this work identifies a previously undisclosed allosteric site in the catalytic core of TGM2. In particular, FSK formed multiple hydrogen bonds in a saddle‐like domain to induce an “open” conformation of the β‐sandwich domain in TGM2, thereby promoting the substrate protein crosslinks by incorporating polyamine. Furthermore, this work finds that TGM2 interacted with several mitochondrial homeostasis‐associated proteins to improve mitochondrial dynamics and ATP production for osteoblast differentiation. Finally, this work observes that FSK effectively ameliorated osteoporosis in the ovariectomy mice model. Taken together, these findings show a previously undescribed pharmacological allosteric site on TGM2 for osteoporosis treatment, and also provide an available chemical tool for interrogating TGM2 biology and developing bone anabolic agent.