Icariin (ICA), the main active flavonoid glucoside isolated from Herba Epimedii, has been shown to prevent postmenopausal bone loss in vitro. However, the mechanisms by which ICA prevents bone loss in vivo remain poorly understood. In the present study, the effect of ICA in an ovariectomized (OVX) rat model of osteoporosis was evaluated. Sprague-Dawley rats were divided into sham-operated and OVX groups. The OVX rats were randomly divided into five groups: OVX group (water only), Fosamax (positive) group (5.04 mg/kg, weekly, administered orally), and OVX-ICA groups (125, 250 or 500 mg/kg, daily, administered orally) and treated for 12 weeks. The 125, 250 and 500 mg/kg doses of ICA were designated as low (L-ICA), medium (M-ICA) and high (H-ICA), respectively. Compared with the sham-operated group, the OVX rats had significantly decreased bone mineral density (BMD), reduced serum osteoprotegerin (OPG) and increased serum bone gla protein (BGP) concentrations. ICA significantly increased BMD, biomechanical strength, trabecular bone number and trabecular bone thickness, and reduced lumbar trabecular bone separation. Treatment with ICA also completely normalized the expression of osteoblast markers by increasing serum concentrations of OPG and BGP. Enhanced mineralization was demonstrated by increased expression of differentiation markers. Although further in vivo studies are required to investigate the efficacy of ICA in improving bone mass, this study demonstrates that ICA has strong osteogenic activity, inducing osteogenic differentiation and inhibiting resorption by osteoclasts. It also demonstrates an antiosteoporotic effect for ICA on the basis of BMD, biochemical markers, biomechanical tests and histopathological parameters. Compared with L-ICA and H-ICA, M-ICA was more effective and caused no liver or kidney damage.