The mechanism of action of retardation of postmenopausal bone loss may be different for dietary calcium augmentation and hormonal replacement therapy (HRT). We performed a three-arm, placebo-controlled, randomized clinical trial comparing an intake of calcium of 1700 mg with: (1) calcium augmentation with HRT and (2) placebo. One hundred and eighteen women entered the study; 17 patients dropped out of the study. The vast majority of women were less than 2 years postmenopause. Bone mineral density declined significantly in the placebo group. The previously reported rates of change in the HRT group were significantly positive for total body calcium and the trochanter and not significantly different from zero for the others. The rate of change in the calcium augmentation group was intermediate between that in the two other groups, and achieved statistical significance compared with placebo for the total body calcium measurement and for the neck of the femur. Measurements were made prior to treatment and at the end of the study (2.9 years +/- 1.1 SD) for parameters of bone turnover and the calcitrophic hormones, to examine whether the mechanism of action was different for calcium augmentation versus hormonal therapy. There were no changes in the placebo group. The calcium augmentation group had a significant increase in 24-h urinary calcium and declining values for urinary collagen cross-links (pyridinium and deoxypyridinium), urinary hydroxyproline and calcitriol. The group treated with HRT and dietary calcium augmentation also had an increase in urinary calcium and a decline in collagen cross-links and urinary hydroxyproline and skeletal alkaline phosphatase; serum calcitriol did not change. The HRT group also displayed a drop in serum osteocalcin, and an increase in nephrogenous cAMP. Serum parathyroid hormone remained unchanged in all groups. Dietary calcium augmentation retards postmenopausal bone loss by decreasing resorption. The addition of HRT results in a more marked decline in bone resorption parameters and a suppression of parameters of bone formation. Whereas calcium augmentation suppressed calcitriol levels, the addition of HRT resulted in maintenance of calcitriol levels, possibly through enhancement of the renal effects of parathyroid hormone, although other mechanisms are possible.