Background Amending from ancient classic, Ziyin Tongluo Formula (ZYTLF) has been prescribed to treat postmenopausal osteoporosis (PMOP) for decades with good curative effect. However, the possible mechanisms of it are still unknown. Methods Ovariectomized rat model was established to validate the therapeutic effect of ZYTLF on PMOP by Micro-CT bone analysis and pathological observation. Subsequently, active ingredients of ZYTLF and corresponding putative targets were identified by online databases. Overlapping genes were first obtained from mining genes associated with PMOP and then overlapped them with the putative targets. Key genes were selected from the multiple constructed and analyzed networks. GO and KEGG pathway enrichment analysis were performed by importing the key genes to the DAVID database. Moreover, validation of the binding association between key targets and their corresponding active compounds were accomplished by AutoDock Tools and other software. Lastly, Enzyme linked immunosorbent assay (Elisa) detection and Western blot analysis were utilized to further explore the possible mechanism of ZYTLF on PMOP. Results With 129 target genes interacting with PMOP, 92 active compounds of ZYTLF corresponded to 243 targets, and 50 key genes were chosen. Network analysis revealed the top 10 active ingredients, such as quercetin and kaempferol and the top 50 key genes, such as ER alpha, p38 MAPK, p-AKT and TGF-beta 1. Enrichment analysis uncovered multiple signaling pathways, including estrogen signaling pathway, TNF signaling pathway, PI3K-Akt signaling pathway and MAPK signaling pathway. Furthermore, our finding of the foremost active compounds was tightly bound to the core proteins, which were verified by molecular docking analysis. Through experimental studies, we confirmed that the prescription of ZYTLF could ameliorate the OVX-induced bone loss, suppress the osteoclast activity and boost osteoblast ability through experimental studies. Conclusion The potential mechanisms and therapeutic effects of ZYTLF against PMOP may be ascribed to inhibition of osteoclast activity, boost of osteoblast activity and enhancement of the expression of ER alpha.