Steroid hormones are synthesized from the squalene-derived cholesterol molecule. The respective steps of side chain modifications are catalyzed by enzymes which belong to the families of cytochrome p450 enzymes, short chain alcohol dehydrogenases and 3β-dehydrogenases. Estrogens are steroidal compounds, which exert effects on gene regulation via estrogen receptors α and β and via rapid effects on second messenger systems. 17β-estradiol is the active hormone, the production and catabolism of which is mediated by members of the above mentioned enzyme families. Cytochrome p450 aromatase and 17β-dehydrogenases are the key enzymes in terms of hormone activation and inactivation. Glandular hormone production and modification has long been looked upon as the sole source of active steroid hormones. During the last two decades a concept of extraglandular hormone modification evolved. The backbone of this concept is the extraglandular expression of steroid metabolizing enzymes and the availability of hormone precursor compounds secreted by the adrenals and gonads. Based on this concept any cell, which is capable of expressing steroid modifying enzymes, can create its own microenvironment, e.g. activate hormone precursors or inactivate active hormones thus mediating intracrine, autocrine and paracrine effects. Bone is an estrogen responsive tissue. Mesenchyme-derived osteoblasts and bone marrow derived myeloid osteoclasts build up and resorb mineralized extracellular matrix thereby forming and  remodeling bone. Estrogens are important in growth, development and maintenance of bone in men and women. In the adult their effect is mainly antiresorptive and loss of systemic estrogens during menopause is one of the major causes of osteoporosis. Local production and metabolism of estrogens could represent a rescue mechanism to maintain bone mass. During the last decade it has been shown that steroid metabolising enzymes are expressed in many different cells of the bone microenvironment. Thus these enzymes might be involved in the pathogenesis of metabolic bone diseases and this renders them candidate genes for the polygenic disease osteoporosis. Future studies will  have to elucidate the clinical relevance as well as the therapeutic potential of drug-directed modulation of local hormone delivery.