Osteoporotic fractures cause major morbidity and mortality in the aging population. Genome-wide association studies (GWAS) have identified USF3 as the novel susceptibility gene of osteoporosis. However, the functional role in bone metabolism and the target gene of the bHLH transcription factor USF3 are unclear. Here we show that USF3 enhances osteoblast differentiation and suppresses osteoclastogenesis in cultured human osteoblast-like U-2OS cells. Mechanistic studies revealed that transcription factor USF3 antagonistically interacts with anti-osteogenic TWIST1/TCF12 heterodimer in the WNT16 and RUNX2 promoter, and counteracts CREB1 and JUN/FOS in the RANKL promoter. Importantly, the osteoporosis GWAS lead SNP rs2908007 risk A allele abolishes USF3 binding in the WNT16 promoter, conferring allele-specific downregulation of the osteoclastogenesis suppressor WNT16. While the risk G allele of osteoporosis GWAS lead SNP rs4531631 facilitates binding of CREB1 and JUN/FOS in the RANKL promoter, resulting in enhanced transactivation of RANKL, the principal contributor to osteoclastogenesis. Our findings uncovered functional mechanisms of osteoporosis novel GWAS associated gene USF3 and lead SNPs rs2908007 and rs4531631 in the regulation of bone formation and resorption.