Calpains are intracellular cysteine proteases, which include widely expressed mu- and m-calpains (1). Both mu-calpains and m-calpains are heterodimers consisting of a large catalytic subunit and a small regulatory subunit. The calpain small subunit encoded by the gene Capn4 directly binds to the intracellular C-terminal tail (C-tail) of the receptor for parathyroid hormone and parathyroid hormone-related peptide and modulates its cellular functions in osteoblasts in vitro (2). To investigate a potential role of the calpain small subunit in osteoblasts in vivo, we generated osteoblast-specific Capn4 knock-out mice using the Cre-LoxP system (3). Mutant mice had smaller bodies with shorter limbs, reduced trabecular bone with thinner cortices, and decreased osteoblast number. In vitro analysis confirmed that deletion of Capn4 in osteoblasts severely affected multiple osteoblast functions including proliferation, differentiation, and matrix mineralization. Collectively, our findings provide the first in vivo demonstration that the calpain small subunit is essential for proper osteoblast activity and bone remodeling.