Osteoporosis is a global health challenge characterized by bone loss and microstructure deterioration, which urgently requires the development of safer and more effective treatments due to the significant adverse effects and limitations of existing drugs for long-term treatment. Traditional Chinese medicine, like Epimedium, offers fewer side effects and has been used to treat osteoporosis, yet its active compounds and pharmacological mechanisms remain unclear. In this study, 65 potential active compounds, 258 potential target proteins, and 488 pathways of Epimedium were identified through network pharmacology analysis. Further network analysis and review of the literature identified six potential active compounds and HIF-1α for subsequent experimental validation. In vitro experiments confirmed that 2″-O-RhamnosylIcariside II is the most effective compound among the six potential active compounds. It can promote osteoblast differentiation, bind with HIF-1α, and inhibit both HIF-1α gene and protein expression, as well as enhance COL1A1 protein expression under hypoxic conditions. In vivo experiments demonstrated its ability to improve bone microstructures and reduce bone loss by decreasing bone marrow adipose tissue, enhancing bone formation, and suppressing HIF-1α protein expression. This study is the first to describe the therapeutic effects of 2-O-RhamnosylIcariside II on osteoporosis, which was done, specifically, through a mechanism that targets and inhibits HIF-1α. This study provides a scientific basis for the clinical application of Epimedium and offers a new candidate drug for the treatment of osteoporosis. Additionally, it provides new evidence supporting HIF-1α as a therapeutic target for osteoporosis.