IL-18BP is a natural antagonist of pro-inflammatory IL-18 cytokine linked to autoimmune disorders like rheumatoid arthritis. However, its role in post menopausal osteoporosis is still unknown. In this study, we investigated the role of IL-18BP on murine osteoblasts, its effect on osteoblasts-CD4+ T cells and osteoblasts-CD11b+ macrophage co-culture. mIL-18BPd enhances osteoblast differentiation and inhibits the activation of NLRP3 inflammasome and caspase-1 which process IL-18 to its active form. Using estrogen deficient mice, we also determined the effect of mIL-18BP on various immune and skeletal parameters. Ovariectomized mice treated with mIL-18BPd exhibited decrease in Th17/Treg ratio and pro-inflammatory cytokines. mIL-18BPd treatment restored trabecular microarchitecture, preserved cortical bone parameters likely attributed to an increased number of bone lining cells and reduced osteoclastogenesis. Importantly, these results were corroborated in female osteoporotic subjects where decreased serum IL-18BP levels and enhanced serum IL-18 levels were observed. Our study forms a strong basis for using humanized IL-18BP towards the treatment of postmenopausal osteoporosis.