Epimedium is thought to enhance the integrity of tendons and bones, ease joint discomfort and rigidity and enhance kidney function. Although glucocorticoids are commonly used in clinical practice, the mechanism by which the active compound Epimedin C (EC) alleviates glucocorticoid‐induced osteoporosis (GIOP) is not well understood. The therapeutic potential of EC in treating GIOP was evaluated using alizarin red S staining, calcein immersion and fluorescence imaging, and bone mineralization, bone mass accumulation and bone density in zebrafish larvae were determined. Using the Kyoto Encyclopedia of Genes and Genomes (KEGG) analysis, the key signalling pathways related to bone development were identified. A protein–protein interaction network (PPIN) was constructed to identify osteoclast characteristic genes and the findings were verified using real‐time quantitative PCR (RT‐qPCR). The bone tissue damage caused by prednisolone was reduced by EC. It also altered physiological processes, improved bone density, boosted mineralization and increased bone mass and activity. Subsequent empirical investigations showed that EC impacted the major signalling pathways involved in bone development, such as osteoclast differentiation, oestrogen, MAPK, insulin resistance, PPAR and AMPK signalling pathways. It also decreased the expression of genes typical of osteoclasts. The results of our study uncover a previously unknown function of EC in controlling bone formation and emphasize the potential of EC as a therapeutic target. The osteoprotective effect of EC indicates its potential as a cost‐effective strategy for treating GIOP.