The type 2 cannabinoid receptor (CB2) has been reported to regulate bone mass and bone turnover but the mechanisms responsible are incompletely understood. In this study we investigated the role that the CB2 pathway plays in bone metabolism using a combination of genetic and pharmacological approaches. Bone mass and turnover were normal in young mice with targeted inactivation of CB2 receptor (CB2 -/-), but by 12 months of age, they had developed high-turnover osteoporosis with relative uncoupling of bone resorption from bone formation. Primary osteoblasts from CB2 -/- mice had a reduced capacity to form bone nodules in vitro when compared with cells from wild-type littermates and also had impaired PTH-induced alkaline phosphatase (ALP) activity. The CB2-selective agonist HU308 stimulated bone nodule formation in wild-type osteoblasts but had no effect in CB2 -/- osteoblasts. Further studies in MC3T3-E1 osteoblast like cells showed that HU308 promoted cell migration and activated ERK phosphorylation, andthese effects were blocked by the CB2 selective inverse agonist AM630. Finally, HU308 partially protected against ovariectomy induced bone loss in wild-type mice in vivo, primarily by stimulating bone formation, whereas no protective effects were observed in ovariectomized CB2 -/- mice. These studies indicate that the CB2 regulates osteoblast differentiation in vitro and bone formation in vivo.