Recent genome-wide association studies of individuals of Asian and European descent have found that SNPs located within the genomic region (1p31.3) encoding the Wntless (Wls)/Gpr177 protein are associated significantly with reduced bone mineral density. Wls/Gpr177 is a newly identified chaperone protein that specifically escorts Wnt ligands for secretion. Given the strong functional association between the Wnt signaling pathways and bone development and homeostasis, we generated osteoblast-specific Wls-deficient (Ocn-Cre;Wls-flox) mice. Homozygous conditional knockout animals were born at a normal Mendelian frequency. Whole-body dual-energy X-ray absorptiometry scanning revealed that bone-mass accrual was significantly inhibited in homozygotes as early as 20 d of age. These homozygotes had spontaneous fractures and a high frequency of premature lethality at around 2 mo of age. Microcomputed tomography analysis and histomorphometric data revealed a dramatic reduction of both trabecular and cortical bone mass in homozygous mutants. Bone formation in homozygotes was severely impaired, but no obvious phenotypic change was observed in mice heterozygous for the conditional deletion. In vitro studies showed that Wls-deficient osteoblasts had a defect in differentiation and mineralization, with significant reductions in the expression of key osteoblast differentiation regulators. In summary, these results reveal a surprising and crucial role of osteoblast-secreted Wnt ligands in bone-mass accrual.