Estrogen deficiency is one of the most frequent causes of osteoporosis in women and a possible cause of bone loss and insufficient skeletal development in men. Estrogen deficiency results from menopause but also by a number of conditions, such as stress, excessive physical activity, and low body weight. The mechanism by which estrogen deficiency causes bone loss remains largely unknown. Estrogen deficiency leads to an increase in the immune function, which culminates in an increased production of TNF by activated T cells. TNF increases osteoclast formation and bone resorption both directly and by augmenting the sensitivity of maturing osteoclasts to the essential osteoclastogenic factor RANKL. Increased T cell production of TNF is induced by estrogen deficiency via a complex mechanism mediated by antigen-presenting cells and involving the cytokines IFN-gamma, IL-7, and TGF-beta. Herein we review the experimental evidence that suggests that estrogen prevents bone loss by regulating T cell function and immune cell bone interactions.