Glucocorticoid‐induced osteoporosis (GIOP) that is mainly featured as low bone density and increased risk of fracture is prone to occur with the administration of excessive glucocorticoids. Cycloastragenol (CAG) has been verified to be a small molecule that activates telomerase. Studied showed that up‐regulated telomerase was associated with promoting osteogeneic differentiation, so we explored whether CAG could promote osteogenic differentiation to protect against GIOP and telomerase would be the target that CAG exerted its function. Our results demonstrated that CAG prominently increased the ALP activity, mineralization, mRNA of runt‐related transcription factor 2, osteocalcin, osteopontin, collagen type I in both MC3T3‐E1 cells and dexamethasone (DEX)‐treated MC3T3‐E1 cells. CAG up‐regulated telomerase reverse transcriptase and the protective effect of CAG was blocked by telomerase inhibitor TMPyP4. Moreover, CAG improved bone mineralization in DEX‐induced bone damage in a zebrafish larvea model. Therefore, the study showed that CAG could alleviate the osteogenic differentiation inhibition induced by DEX in vitro and in vivo, and CAG might be considered as a candidate drug for the treatment of GIOP.