Prolonged glucocorticoid treatment is known to cause osteoporosis or aseptic necrosis. Secreted frizzled-related proteins 1 (SFRP1) and low-density lipoprotein-related protein 5 (LRP5), a Wnt protein antagonist and a co-receptor, have been found to regulate skeletogenesis. While recent studies have reported that excess glucocorticoid promotes bone loss, the biological role of SFRP1 and LRP5 in regulating glucocorticoid attenuation of bone formation is not fully understood. We showed that a supraphysiological level of glucocorticoid enhanced SFRP1, but not LRP5 expression of primary mesenchymal cell cultures in vitro and osteoblasts at metaphyseal trabecular endosteum and chondrocytes at calcified cartilage in vivo. Glucocorticoid augmentation of SFRP1 expression was transcriptionally mediated. The inhibitory action of glucocorticoid on osteogenic differentiation appeared to be regulated by SFRP1 mediation of -catenin destabilization, because knocking down SFRP1 by RNA interference abrogated the supraphysiological level of glucocorticoid attenuation of osteogenesis. Recombinant human SFRP1 reduced the promoting effect of physiological level of glucocorticoid on cytosolic -catenin accumulation, Runx2 activation and osteogenic activities. Glucocorticoid and recombinant human SFRP1 significantly increased osteochondral cell apoptosis associated with reduced mineral density, biomechanical properties, trabecular bone volume, and midshaft cortical bone areas in rat femurs. These findings suggest that SFRP1 modulates glucocorticoid-induced bone loss. Regulation of Wnt/SFRP signal transduction can be used in the future as an alternative strategy for the prevention of glucocorticoid-induced osteoporosis.