Canonical Wnt signaling has been demonstrated to increase bone formation, and Wnt pathway components are being pursued as potential drug targets for osteoporosis and other metabolic bone diseases. Deletion of the Wnt antagonist secreted frizzled-related protein (sFRP)-1 in mice activates canonical signaling in bone and increases trabecular bone formation in aged animals. We have developed small molecules that bind to and inhibit sFRP-1 in vitro and demonstrate robust anabolic activity in an ex vivo organ culture assay. A library of over 440,000 drug-like compounds was screened for inhibitors of human sFRP-1 using a cell-based functional assay that measured activation of canonical Wnt signaling with an optimized T-cell factor (TCF)-luciferase reporter gene assay. One of the hits in this screen, a diarylsulfone sulfonamide, bound to sFRP-1 with a K(D) of 0.35 microM in a tryptophan fluorescence quenching assay. This compound also selectively inhibited sFRP-1 with an EC(50) of 3.9 microM in the cell-based functional assay. Optimization of this high throughput screening hit for binding and functional potency as well as metabolic stability and other pharmaceutical properties led to improved lead compounds. One of these leads (WAY-316606) bound to sFRP-1 with a K(D) of 0.08 microM and inhibited it with an EC(50) of 0.65 microM. Moreover, this compound increased total bone area in a murine calvarial organ culture assay at concentrations as low as 0.0001 microM. This work demonstrates the feasibility of developing small molecules that inhibit sFRP-1 and stimulate canonical Wnt signaling to increase bone formation.