The endocannabinoid system consists mainly of 2-arachidonoylglycerol and anandamide, as well as cannabinoid receptor type 1 and type 2 (CB2). Based on previous studies, we hypothesized that a circulating peptide previously identified as osteogenic growth peptide (OGP) maintains a bone-protective CB2 tone. We tested OGP activity in mouse models and cells, and in human osteoblasts. We show that the OGP effects on osteoblast proliferation, osteoclastogenesis, and macrophage inflammation in vitro, as well as rescue of ovariectomy-induced bone loss and prevention of ear edema in vivo are all abrogated by genetic or pharmacological ablation of CB2. We also demonstrate that OGP binds at CB2 and may act as both an agonist and positive allosteric modulator in the presence of other lipophilic agonists. In premenopausal women, OGP circulating levels significantly decline with age. In adult mice, exogenous administration of OGP completely prevented age-related bone loss. Our findings suggest that OGP attenuates age-related bone loss by maintaining a skeletal CB2 tone. Importantly, they also indicate the occurrence of an endogenous peptide that signals via CB2 receptor in health and disease.