Estrogen deficiency, which is linked to various pathological conditions such as primary ovarian insufficiency and postmenopausal osteoporosis, disrupts the delicate balance between bone formation and resorption. This imbalance leads to bone loss and an increased risk of fractures, primarily due to a significant reduction in trabecular bone mass. Trabecular osteoblasts, the cells responsible for bone formation within the trabecular compartment, originate from skeletal progenitors located in the bone marrow. The microenvironment of the bone marrow contains hypoxic (low oxygen) regions, and the hypoxia-inducible factor-2α (HIF2) plays a crucial role in cellular responses to these low-oxygen conditions. This study demonstrates that the loss of HIF2 in skeletal progenitors and their derivatives during development enhances trabecular bone mass by promoting bone formation. More importantly, PT2399, a small molecule that specifically inhibits HIF2, effectively prevents trabecular bone loss in ovariectomized adult mice, a model for estrogen-deficient bone loss. Both the genetic and pharmacological approaches result in an increase in osteoblast number, which is linked to the expansion of the pool of skeletal progenitor cells. This expansion either by loss or inhibition of HIF2 uncovers a pivotal mechanism for increasing osteoblast numbers and bone formation, resulting in greater trabecular bone mass.