Despite the clinical importance of cholestatic osteopenia, little is known about its pathophysiologic mechanism. By tetracycline-labeled histomorphometric analysis of bone biopsies taken at the time of liver transplantation, we prospectively evaluated bone resorption and formation in 50 consecutive patients with advanced primary biliary cirrhosis (PBC) and primary sclerosing cholangitis (PSC). Histomorphometric analysis confirmed low bone volume parameters, consistent with the mean T-score of the lumbar spine of −1.9 by dual energy x-ray absorptiometry. Dynamic (bone formation rates, adjusted apposition rates) and static (osteoid markers, osteoblast number) parameters of bone formation were decreased in cholestatic patients with no abnormalities in mineralization. Increased osteoclast numbers and increased eroded surface areas suggested increased bone resorption, and this was supported in female patients by increased trabecular separation and decreased trabecular number. Male cholestatic patients, however, did not have significant increases in resorption parameters, although they were as osteopenic as female patients and had low bone formation markers. Bone histomorphometric changes were similar in PBC and PSC, suggesting an etiologic effect of chronic cholestasis rather than the individual diseases. Cancellous bone volume and osteoid markers correlated with bone mineral density measurements but no correlations were found between histomorphometric parameters and biochemical markers of bone metabolism. In conclusion, cholestatic osteopenia appears to result from a combination of decreased bone formation and increased resorption, especially in female patients, but the relative importance of these two abnormalities and their actual etiology remain to be elucidated.