Androgens have beneficial effects on skeletal development and maintenance in women and men. The detection and functional characterization of androgen receptors in bone cells has implicated bone tissue as a potential target tissue for androgens. Gonadal and adrenal androgens directly regulate various aspects of osteoblastic lineage cells, including proliferation, differentiation, mineralization, and gene expression. These effects may differ depending on the stage of differentiation, the number of androgen receptors, and other inherent characteristics (species, site, cell biology) of the osteoblastic cell system. In addition, recent studies have suggested that some of the anabolic and anti-resorptive effects of androgens on bone may be mediated by regulation of autocrine and paracrine factors in the bone microenvironment, including transforming growth factor-beta, insulin-like growth factors (and their binding proteins), and interleukin-6. This review summarizes the recent progress made in our knowledge of androgen receptor action, local androgen metabolism in bone, and direct and indirect effects of gonadal and adrenal androgens as well as androgen receptor antagonists on bone cells.