Human small leucine zipper protein (sLZIP) regulates differentiation of both osteoblasts (OBs) and osteoclasts (OCs). However, the regulatory role of sLZIP in bone remodeling and its involvement in bone disorders remain unclear. In this study, we investigated the role of sLZIP in bone remodeling and its significance in the development of cell therapies for the treatment of bone diseases. sLZIP increased bone mass in an osteoporosis mouse model. However, bone mass was lower in mesenchymal stem cell-specific murine LZIP-1/2 knockout (Osx-LZIP-1/2 fl/fl ) mice than in control LZIP-1/2 fl/fl mice. Osx-LZIP-1/2 fl/fl mice showed delayed bone fracture healing in osteoporosis compared with control mice. Conditioned medium (CM) of OBs differentiated from adipose-derived stem cells (ADSCs) in Osx-LZIP-1/2 fl/fl mice attenuated OC formation and migration of bone marrow-derived macrophages. However, CM of OCs from sLZIP transgenic mice induced OB differentiation and migration. sLZIP regulates secretion of OC-derived sphingosine-1-phosphate, which induces OB differentiation. sLZIP also regulates OB-derived WNT16, which inhibits OC differentiation. Therefore, sLZIP functions as a key modulator of the crosstalk between OBs and OCs and promotes bone remodeling and fracture healing in osteoporosis. In addition, sLZIP-overexpressing ADSCs promoted bone formation and repair in osteoporosis. sLZIP is an excellent target for the stem cell-based treatment of osteoporosis.