Osteoprotegerin (OPG) is a secreted member of the TNF receptor superfamily, which binds to the receptor activator of nuclear factor κB ligand (RANKL) and inhibits osteoclast activity and bone resorption. Systemic administration of recombinant OPG was previously shown to inhibit tumor growth in bone and to prevent cancer-induced osteolysis. In this study, we examined the effect of OPG, when produced locally by breast cancer cells located within bone, using a mouse model of osteolytic breast cancer. MDA-MB-231-TXSA breast cancer cells, tagged with a luciferase reporter gene construct and engineered to overexpress full-length human OPG, were transplanted directly into the tibial marrow cavity of nude mice. Overexpression of OPG by breast cancer cells protected the bone from breast cancer-induced osteolysis and diminished intra-osseous tumor growth but had no effect on extra-skeletal tumor growth. This effect was associated with a significant reduction in the number of osteoclasts that lined the bone surface, resulting in a net increase in bone volume. Despite limiting breast cancer-mediated bone loss, OPG overexpression resulted in a significant increase in the incidence of pulmonary metastasis. Our results demonstrate that inhibition of osteoclastic bone resorption by OPG when secreted locally by tumors in bone may affect the behaviour of cancer cells within the bone microenvironment and their likelihood of spreading and establishing metastasis elsewhere in the body.