Raloxifene and idoxifene are selective estrogen receptor modulators (SERMs) that exhibit tissue-specific agonist or antagonist properties via interactions with the estrogen receptor (ER). Both compounds are similarly osteoprotective in the ovariectomized rat in vivo as assessed by measurement of bone mineral density, urinary pyridinium cross-links, and serum osteocalcin, suggesting a similar mechanism of action. However, we have identified a fundamental difference in this mechanism via the estrogen response element (ERE) in osteoblast-like cells. With the use of ERE-luciferase reporter constructs, raloxifene, like the complete ER-antagonist ICI-182780, acts as an antagonist via the ERE in osteoblastic cells. In contrast, idoxifene, like 17-estrogen itself and 4-OH-tamoxifen, acts as an agonist in osteoblastic cells via an ER/ERE-mediated mechanism. Both ICI-182780 and raloxifene inhibited the ERE-dependent agonist activity of 17-estradiol and idoxifene in osteoblastic cells. In contrast, in breast cells, raloxifene, idoxifene, 4-OH-tamoxifen, and ICI-182780 had no agonist activity and, indeed, raloxifene and idoxifene were potent antagonists of ERE-mediated 17-estradiol action, indicating an ERE-dependent mode of action in these cells. Although these SERMs exhibit a similar antagonist activity profile in breast cells, they can be distinguished mechanistically in osteoblastic cells.