Long-term glucocorticoid treatment is associated with numerous adverse outcomes, including weight gain, insulin resistance, and diabetes; however, the pathogenesis of these side effects remains obscure. Glucocorticoids also suppress osteoblast function, including osteocalcin synthesis. Osteocalcin is an osteoblast-specific peptide that is reported to be involved in normal murine fuel metabolism. We now demonstrate that osteoblasts play a pivotal role in the pathogenesis of glucocorticoid-induced dysmetabolism. Osteoblast-targeted disruption of glucocorticoid signaling significantly attenuated the suppression of osteocalcin synthesis and prevented the development of insulin resistance, glucose intolerance, and abnormal weight gain in corticosterone-treated mice. Nearly identical effects were observed in glucocorticoid-treated animals following heterotopic (hepatic) expression of both carboxylated and uncarboxylated osteocalcin through gene therapy, which additionally led to a reduction in hepatic lipid deposition and improved phosphorylation of the insulin receptor. These data suggest that the effects of exogenous high-dose glucocorticoids on insulin target tissues and systemic energy metabolism are mediated, at least in part, through the skeleton.