Paget's disease of the bone (PDB) is an autosomal dominant trait with genetic heterogeneity, characterized by abnormal osteoclastogenesis. Sequestosome 1 (p62) is a scaffold protein that plays an important role in receptor activator of nuclear factor κB (RANK) signaling essential for osteoclast (OCL) differentiation. p62P392L mutation in the ubiquitin-associated (UBA) domain is widely associated with PDB; however, the mechanisms by which p62P392L stimulate OCL differentiation in PDB are not completely understood. Deubiquitinating enzyme cylindromatosis (CYLD) has been shown to negatively regulate RANK ligand-RANK signaling essential for OCL differentiation. Here, we report that CYLD binds with the p62 wild-type (p62WT), non-UBA mutant (p62A381V) but not with the UBA mutant (p62P392L) in OCL progenitor cells. Also, p62P392L induces expression of c-Fos (2.8-fold) and nuclear factor of activated T cells c1 (6.0-fold) transcription factors critical for OCL differentiation. Furthermore, p62P392L expression results in accumulation of polyubiquitinated TNF receptor-associated factor (TRAF)6 and elevated levels of phospho-IκB during OCL differentiation. Retroviral transduction of p62P392L/CYLD short hairpin RNA significantly increased TRAP positive multinucleated OCL formation/bone resorption activity in mouse bone marrow cultures. Thus, the p62P392L mutation abolished CYLD interaction and enhanced OCL development/bone resorption activity in PDB.