Adiponectin, an adipokine, regulates metabolic processes, including glucose flux, lipid breakdown, and insulin response, by activating adiponectin receptors 1 and 2 (AdipoR1 and AdipoR2). We have previously shown that globular adiponectin (gAd), an endogenous form of adiponectin, has osteoanabolic and anti-catabolic effects in rodent models of postmenopausal osteopenia. Moreover, we reported the identification of a 13-mer peptide (ADP-1) from the collagen domain of adiponectin, which exhibited significant adiponectin-mimetic properties. Since the clinical development of gAd is constrained by its large size, here, we investigated the osteogenic property of ADP-1. ADP-1 induced osteoblast differentiation more potently than gAd. ADP-1 elicited osteoblast differentiation through two downstream pathways that involved the participation of adiponectin receptors. Firstly, it enhanced mitochondrial biogenesis and OxPhos, leading to osteoblast differentiation. Secondly, it activated the Akt-glycogen synthase kinase 3β-Wnt pathway, thereby increasing osteoblast differentiation. Additionally, ADP-1 suppressed the production of receptor-activator of nuclear kappa B ligand from osteoblasts, enabling it to act as a dual-action molecule (suppressing osteoclast function besides promoting osteoblast function). In osteopenic ovariectomized rats, ADP-1 increased bone mass and strength and improved trabecular integrity by stimulating bone formation and inhibiting bone resorption. Furthermore, by increasing ATP-producing intermediates within the tricarboxylic acid cycle in bones, ADP-1 likely fueled osteoblast function. Given its dual-action mechanism and high potency, ADP-1 offers a unique opportunity to address the unmet clinical need to reset the aberrant bone remodeling in osteoporosis to normalcy, potentially offering a disease-modifying impact.