Glucocorticoids (GCs) are potent anti-inflammatory drugs, but their use is limited by their adverse effects on the skeleton. Compound A (CpdA) is a novel GC receptor modulator with the potential for an improved risk/benefit profile. We tested the effects of CpdA on bone in a mouse model of GC-induced bone loss. Bone loss was induced in FVB/N mice by implanting slow-release pellets containing either vehicle, prednisolone (PRED) (3.5 mg), or CpdA (3.5 mg). After 4 weeks, mice were killed to examine the effects on the skeleton using quantitative computed tomography, bone histomorphometry, serum markers of bone turnover, and gene expression analysis. To assess the underlying mechanisms, in vitro studies were performed with human bone marrow stromal cells (BMSCs) and murine osteocyte-like cells (MLO-Y4 cells). PRED reduced the total and trabecular bone density in the femur by 9% and 24% and in the spine by 11% and 20%, respectively, whereas CpdA did not influence these parameters. Histomorphometry confirmed these results and further showed that the mineral apposition rate was decreased by PRED whereas the number of osteoclasts was increased. Decreased bone formation was paralleled by a decline in serum procollagen type 1 N-terminal peptide (P1NP), reduced skeletal expression of osteoblast markers, and increased serum levels of the osteoblast inhibitor dickkopf-1 (DKK-1). In addition, serum CTX-1 and the skeletal receptor activator of NF-κB ligand (RANKL)/osteoprotegerin (OPG) ratio were increased by PRED. None of these effects were observed with CpdA. Consistent with the in vivo data, CpdA did not increase the RANKL/OPG ratio in MLO-Y4 cells or the expression of DKK-1 in bone tissue, BMSCs, and osteocytes. Finally, CpdA also failed to transactivate DKK-1 expression in bone tissue, BMSCs, and osteocytes. This study underlines the bone-sparing potential of CpdA and suggests that by preventing increases in the RANKL/OPG ratio or DKK-1 in osteoblast lineage cells, GC-induced bone loss may be ameliorated. © 2012 American Society for Bone and Mineral Research.