The rhizome of Atractylodes macrocephala has been used mainly in Traditional Chinese Medicine for invigorating the functions of the stomach and spleen. In the present study, we investigated the inhibitory effect of the 70% ethanol extract of the rhizome of Atractylodes macrocephala (AMEE) on osteoclast differentiation. We found that AMEE inhibits osteoclast differentiation from its precursors induced by receptor activator of nuclear factor-κB ligand (RANKL), an essential cytokine required for osteoclast differentiation. AMEE attenuated RANKL-induced activation of NF-κB signaling pathway, subsequently inhibiting the induction of osteoclastogenic transcription factors, c-Fos and nuclear factor of activated T cells cytoplasmic 1. Consistent with the in vitro results, administration of AMEE protected RANKL-induced bone loss in mice. We also identified atractylenolide I and II as active constituents contributing to the anti-osteoclastogenic effect of AMEE. Taken together, our results demonstrate that AMEE has a protective effect on bone loss via inhibiting osteoclast differentiation and suggest that AMEE may be useful in preventing and treating various bone diseases associated with excessive bone resorption.