BACKGROUNDOsteoporosis is a systemic skeletal disorder characterized by decreased bone mass and impaired bone microarchitecture because of an imbalance between bone resorption and formation. Existing pharmacological treatments often have significant side effects and mainly focus on inhibiting bone resorption. Other than inhibiting osteoclast‐mediated bone resorption, the present study also investigates the potential role of sheepskin collagen peptide (SSCP) in bone formation by promoting osteoblast proliferation, differentiation and mineralization.RESULTSSSCP improved bone mineral density in ovariectomized mice by improving bone volume, trabecular thickness and trabecular number. Histological analysis and tartrate‐resistant acid phosphatase (TRAP) staining revealed denser trabeculae and decreased osteoclast activity, accompanied by a normalized receptor activator of nuclear factor kappa‐B ligand/osteoprotegerin ratio and reduced serum TRAP levels. SSCP promotes the proliferation, differentiation and mineralization of MC3T3‐E1 osteoblast cells by upregulating osteogenic markers such as bone morphogenetic protein (BMO)‐2, runt‐related transcription factor (RUNX)‐2 and β‐catenin. SSCP enhanced bone formation and suppressed bone resorption by activating the WNT/β‐catenin and BMP/Smad signaling pathways.CONCLUSIONSSCP offers a dual modulatory approach to bone health, addressing both bone formation and resorption. Its activation of key osteogenic pathways and improvement in bone structural integrity highlight its therapeutic potential for managing osteoporosis and enhancing skeletal health. By activating key osteogenic pathways and normalizing bone metabolism markers, SSCP presents a promising therapeutic candidate for osteoporosis and other bone‐related conditions. Further clinical studies are needed to confirm these findings and explore its potential applications. © 2024 Society of Chemical Industry.