TGF-β is abundantly produced in the skeletal system and plays a crucial role in skeletal homeostasis. E-selectin ligand-1 (ESL-1), a Golgi apparatus-localized protein, acts as a negative regulator of TGF-β bioavailability by attenuating maturation of pro–TGF-β during cartilage homeostasis. However, whether regulation of intracellular TGF-β maturation by ESL-1 is also crucial during bone homeostasis has not been well defined. Here, we show that Esl-1^−/− mice exhibit a severe osteopenia with elevated bone resorption and decreased bone mineralization. In primary culture, Esl-1^−/− osteoclast progenitors show no difference in osteoclastogenesis. However, Esl-1^−/− osteoblasts show delayed differentiation and mineralization and stimulate osteoclastogenesis more potently in the osteoblast–osteoclast coculture, suggesting that ESL-1 primarily acts in osteoblasts to regulate bone homeostasis. In addition, Esl-1^−/− calvaria exhibit an elevated mature TGF-β/pro–TGF-β ratio, with increased expression of TGF-β downstream targets (plasminogen activator inhibitor-1, parathyroid hormone-related peptide, connective tissue growth factor, and matrix metallopeptidase 13, etc.) and a key regulator of osteoclastogenesis (receptor activator of nuclear factor κB ligand). Moreover, in vivo treatment with 1D11, a pan–TGF-β antibody, significantly improved the low bone mass of Esl-1^−/− mice, suggesting that elevated TGF-β signaling is the major cause of osteopenia in Esl-1^−/− mice. In summary, our study identifies ESL-1 as an important regulator of bone remodeling and demonstrates that the modulation of TGF-β maturation is pivotal in the maintenance of a homeostatic bone microenvironment and for proper osteoblast–osteoclast coupling.