The nuclear receptor peroxisome proliferator-activated receptor (PPAR)γ is a crucial cellular and metabolic switch that regulates many physiologic and disease processes. Emerging evidence reveals that PPARγ is also a key modulator of skeletal remodeling. Long-term use of rosiglitazone, a synthetic PPARγ agonist and a drug to treat insulin resistance, increases fracture rates among patients with diabetes. Recent studies have revealed that PPARγ activation not only suppresses osteoblastogenesis, but also activates osteoclastogenesis, thereby decreasing bone formation while sustaining or increasing bone resorption. The pro-osteoclastogenic effect of rosiglitazone is mediated by a transcriptional network comprised of PPARγ, PPAR-gamma coactivator 1β and estrogen-related receptor α, which promotes both osteoclast differentiation and mitochondrial activation. Therefore, PPARγ plays dual roles in bone homeostasis by regulating both mesenchymal and hematopoietic lineages.