Estrone sulfate (E1S) is the most abundant estrogen in the circulation of adults. The present study was undertaken to assess estrone (E1) and estradiol formation from E1S in freshly resected bone [bone fragments (BFs)] and osteoblast-like cells (hOB) cultured from BFs. Furthermore, we compared estrogen formation from E1S in rat and human osteosarcoma (OS) cell lines and that of estrogen formation from E1S with that of aromatization of androstenedione and testosterone in BFs and those from E1S and androstenedione in hOB cells. The bone used was from the head of the femur from a total of 15 women and 12 men. Steroid sulfatase activity (STA) was found, and the formation of estrone and estradiol from E1S was demonstrated. STA was similar in cells derived from BFs of men and women. STA was significantly lower in OS cell lines, compared with hOB cells. Estrogen formation from E1S in BFs was at least 20 times higher than that from androstenedione and about 50 times higher than that from testosterone. Similarly, estrogen formation from E1S in hOB cells exceeded the values derived from aromatization of androstenedione by two orders of magnitude. Based on these results, we conclude that hOB cells express the same pattern of E1S metabolism as resected bone and thus may accurately mirror the in vivo situation in man. In comparison with hOB cells, STA is fundamentally lower in widely used OS cell lines that express an osteoblastic phenotype. This shortcoming precludes their use as model cell lines to unravel STA metabolic pathways and its regulation in nontumorous bone. E1S is a major source of local bioactive estrogen formation in human bone. Because bone is highly susceptible to estrogen action, local estrogen formation from E1S may play an important role in bone maturation and homeostasis, particularly in elderly adults.