A better understanding of how bone growth is regulated during peripuberty is important for optimizing the attainment of peak bone mass and for the prevention of osteoporosis in later life. In this report we used hierarchical models to evaluate the associations of insulin‐like growth factor 1 (IGF‐1), estradiol (E₂), and testosterone (T) with peripubertal bone growth in a 7‐year longitudinal study. Two‐hundred and fifty‐eight healthy girls were assessed at baseline (mean age 11.2 years) and at 1, 2, 3.5, and 7 years. Serum concentrations of IGF‐1, E₂, and T were determined. Musculoskeletal properties in the left lower leg were measured using peripheral quantitative computed tomography (pQCT). Serum levels of IGF‐1, E₂, and T increased dramatically before menarche, whereas they decreased, plateaued, or increased at a lower rate, respectively, after menarche. IGF‐1 level was positively associated with periosteal circumference (PC) and total bone mineral content (tBMC) throughout peripuberty but not after adjustment for muscle cross‐sectional area (mCSA). On the other hand, IGF‐1 was associated with tibial length (TL) independently of mCSA before menarche. T was positively associated with TL, PC, tBMC, and cortical volumetric bone mineral density, independent of mCSA, before menarche but not after. E₂ was associated with TL positively before menarche but negatively after menarche. These findings suggest that during puberty, circulating IGF‐1 promotes bone periosteal apposition and mass accrual indirectly, probably through stimulating muscle growth, whereas the effects of sex steroids on bone growth differ before and after menarche, presenting a biphasic pattern. Hence the concerted actions of these hormones are essential for optimal bone development in peripuberty. © 2011 American Society for Bone and Mineral Research