Oxytocin (OT) is a primitive neurohypophyseal hormone that plays a primary and indispensible role in mammalian lactation. We have shown recently that OT also regulates bone remodeling, mainly bone formation, with remarkable sensitivity. We now show that OT, apart from its neurohypophyseal origin, is produced in abundance by both human and murine osteoblasts. Production of osteoblast OT is under the control of estrogen, which acts by activating the MAP kinase Erk. This non-genomic mechanism of estrogen action is in stark contrast to its genomic control of OT receptor (OTR) expression. We surmise that there is a local feed-forward loop in bone marrow through which the OT so produced from osteoblasts in response to estrogen acts upon its receptor to exert a potent anabolic action.