Here is a short fairly concise description of its action:
Clomiphene citrate binds with the estrogen receptor and causes the hypothalamus to sense a lack of estrogen, resulting in increased secretion of gonadotropins (FSH and LH.)
This was taken from:
http://www.parentsplace.com/expert/fertilityspecialist/qas/0,10338,166260_111578,00.html
For a longer winded explanation from a more bodybuilding standpoint read here:
http://www.pharmaeurope.com/CLOMID.asp
Clomid - Clomiphene citrate
Clomid is not an anabolic/androgenic steroid. Since it is a synthetic estrogen it belongs, however, to the group of sex hormones. In school medicine Clomid is normally used to trigger ovulation. Clomid, by setting in motion the process of releasing hormones, stimulates the release of gonadotropin and triggers ovulation in women with anovulatory cycles and who are sterile because of this. Although this is actually a drug destined for women its effect on men is undisputed. The manufacturer of Dyneric,the Merrell Dow Pharma GmbH, writes in its package insert for the German version of Clomid: "Dyneric causes an improved activity between mid-brain, pituitary gland, and ovaries." What however is not mentioned is that Dyneric also improves the activity between mid-brain (hypothalamus), pituitary gland thypophysis), and testes in men. Clomid has a strong influence on the hypothalamohypophysial testicular axis. It stimulates the hypophysis to release more gonadotropin so that a faster and higher release of FSH (follicle stimulating hormone) aud LH (luteinizing hormone) occurs. This results in an elevated endogenous (body's own testosterone level. Clomid is especially effective when the body's own testosterone production, due to the intake of anabolic/androgenic steroids, is suppressed. In most cases Clomid can normalize the testosterone level and the spermatogenesis (sperm development)within 10-14 days. For this reason Clomid is primarily taken after steroids are discontinued. At this time it is extremely important to bring the testosterone production to a normal level as quickly as possible so that the loss of strength and muscle mass is minimized. Even better results can be achieved if Clomid is combined with HCG or when Clomid is used after the intake of HCG. The difference between Clomid and HCG lies in the fact that Clomid has a direct influence on the hypothalamus and the hypophysis, thus regenerating the entire regulating cycle while HCG imitates the effect of the luteinizing hormone (LH) which stimulates the Ledig's cells fo produce more testosterone. Since HCG, unlike Clomid, leads to a distinctly elevated plasmatestosterone level within a few hours, many athlets first take HCG and then Clomid (see also HCG).
Paradoxically, although Clomid is a synthetic estrogen it also works as an antiestrogen. The reason is that Clomid has only a very low estrogenic effect and thus the stronger estrogens which, for example form during the aromatization of steroids, are blocked at the receptors. These would include those that develop during the aromatizing of steroids. This does not prevent the steroids from aromatizing but the increased estrogen is mostly deactivated since it cannot attach to the receptors. The inereased water retention and the possible signs of feminization can thus be reduced or even completely avoided. Since the antiestrogenic effect of Clomid is lower than those found in Proviron, Nolvadex, and Teslac it is mainly taken as a testosterone stimulant. From the German book Doping By Brigitte Berendonk the reader can learn that Clomid is not only used in bodybuilding: "During the 1980's Clomiphene (table 2) has been used, a medication that promotes the production of the body's own stimulating hormone, gonadotropin, which in turn increases the testosterone level. - It is, for example, administered to women as a so-called antiestrogen to trigger ovulation ("ovulation stimulator").Clomiphene (usually the Hungarian compound Clostilbegyt) was used by rowers (resp. Prof. Dr. Herbert Gurtler) and weightlifers (Dr Lathan; p. 187) since the late 1970's. Increasingly, it was used in other sports disciplines as well, including track and field athletics. Riedel, at the time, happily made the handwritten entry in his notebook: "Substance that is not an anabolic: generally traceable but is not a doping substance." The dosages were horrendous. I found entries of up to l5 times 100mg daily and the report that the positive effect lasts up to 20 days after the last tablet is taken. And it was already assured since 1982 that the increased testosterone production after doping with Clomiphene did not reveal traits of the T/E quotient (testosterone/epitestosterone quotient, the author)during doping tests.