In multiple myeloma (MM), increased osteoclast differentiation leads to the formation of osteolytic lesions in most MM patients. Bisphosphonates, such as zoledronic acid (ZA), are used to ameliorate bone resorption, but due to risk of serious side effects as well as the lack of repair of existing lesions, novel anti-bone resorption agents are required. Previously, the absence of osteolytic lesions in MM was strongly associated with elevated levels of cystatin M/E (CST6), a cysteine protease inhibitor, secreted by MM cells. In this study, both MM- and ovariectomy (OVX)-induced osteoporotic mouse models were used to compare the effects of recombinant mouse CST6 (rmCst6) and ZA on preventing bone loss. μCT showed that rmCst6 and ZA had similar effects on improving percent bone volume, and inhibited differentiation of non-adherent bone marrow cells into mature osteoclasts. Single-cell RNA sequencing showed that rmCst6 and not ZA treatment reduced bone marrow macrophage percentage in the MM mouse model compared to controls. Protein and mRNA arrays showed that both rmCst6 and ZA significantly inhibit OVX-induced expression of inflammatory cytokines. For OVX mice, ERα protein expression in bone was brought to sham surgery level by only rmCst6 treatments. rmCst6 significantly increased mRNA and protein levels of ERα and significantly increased total intracellular estrogen concentrations for ex vivo osteoclast precursor cell cultures. Based on these results, we conclude that CST6 improves MM or OVX bone loss models by increasing the expression of estrogen receptors as well as the intracellular estrogen concentration in osteoclast precursors, inhibiting their maturation.