To evaluate the skeletal effects of endogenous serum estradiol, we measured bone mineral density (BMD) at the calcaneus and radius (single photon absorptiometry) and at the hip and spine (dual x-ray absorptiometry) in 274 women aged 65 yr or more who participated in the Study of Osteoporotic Fractures. Lateral radiographs of the thoracic and lumbar spine were also taken, and serum was assayed for estradiol. Those who had estradiol levels from 10–25 pg/mL had 4.9%, 9.6%, 7.3%, and 6.8% greater BMD at total hip, calcaneus, proximal radius, and spine than those with levels below 5 pg/mL. After multiple adjustments, BMD differences remained statistically significant and corresponded to about 0.4 sd. Vertebral deformities were less prevalent among women whose estradiol level exceeded 5 pg/mL; the multiple adjusted odds ratio was 0.4 (95% confidence interval, 0.2–0.8). We conclude that physiologically low estradiol has a salutary effect on the skeleton in elderly women, possibly by reducing skeletal remodeling.