Wnt signalling is a key pathway controlling bone formation in mice and humans. One of the regulators of this pathway is Dkk1, which antagonizes Wnt signalling through the formation of a ternary complex with the transmembrane receptors Krm1/2 and Lrp5/6, thereby blocking the induction of Wnt signalling by the latter ones. Here we show that Kremen-2 (Krm2) is predominantly expressed in bone, and that its osteoblast-specific over-expression in transgenic mice (Col1a1-Krm2) results in severe osteoporosis. Histomorphometric analysis revealed that osteoblast maturation and bone formation are disturbed in Col1a1-Krm2 mice, whereas bone resorption is increased. In line with these findings, primary osteoblasts derived from Col1a1-Krm2 mice display a cell-autonomous differentiation defect, impaired canonical Wnt signalling and decreased production of the osteoclast inhibitory factor Opg. To determine whether the observed effects of Krm2 on bone remodeling are physiologically relevant, we analyzed the skeletal phenotype of 24 weeks old Krm2-deficient mice and observed high bone mass caused by a more than three-fold increase in bone formation. Taken together, these data identify Krm2 as a regulator of bone remodeling and raise the possibility that antagonizing KRM2 might prove beneficial in patients with bone loss disorders.