Erythroblast erythroferrone (ERFE) secretion inhibits hepcidin expression by sequestering several bone morphogenetic protein (BMP) family members to increase iron availability for erythropoiesis. We report that ERFE expression in osteoblasts is higher compared with erythroblasts, is independent of erythropoietin, and functional in suppressing hepatocyte hepcidin expression. Erfe-/- mice display low–bone–mass arising from increased bone resorption despite a concomitant increase in bone formation. Consistently, Erfe-/- osteoblasts exhibit enhanced mineralization, Sost and Rankl expression, and BMP–mediated signaling ex vivo. The ERFE effect on osteoclasts is mediated through increased osteoblastic RANKL and sclerostin expression, increasing osteoclastogenesis in Erfe-/- mice. Importantly, Erfe loss in β–thalassemic (Hbbth3/+) mice, a disease model with increased ERFE expression, triggers profound osteoclastic bone resorption and bone loss. Together, ERFE exerts an osteoprotective effect by modulating BMP signaling in osteoblasts, decreasing RANKL production to limit osteoclastogenesis, and prevents excessive bone loss during expanded erythropoiesis in β–thalassemia.