Osteoactivin is a heavily glycosylated protein shown to have a role in bone remodeling. Previous studies from our lab have shown that mutation in Osteoactivin enhances osteoclast differentiation but inhibits their function. To date, a classical receptor and a signaling pathway for Osteoactivin-mediated osteoclast inhibition has not yet been characterized. In this study, we examined the role of Osteoactivin treatment on osteoclastogenesis using bone marrow-derived osteoclast progenitor cells and identify a signaling pathway relating to Osteoactivin function. We reveal that recombinant Osteoactivin treatment inhibited osteoclast differentiation in a dose-dependent manner shown by qPCR, TRAP staining, activity and count. Using several approaches, we show that Osteoactivin binds CD44 in osteoclasts. Furthermore, recombinant Osteoactivin treatment inhibited ERK phosphorylation in a CD44-dependent manner. Finally, we examined the role of Osteoactivin on receptor activator of nuclear factor-κ B ligand (RANKL)-induced osteolysis in vivo. Our data indicate that recombinant Osteoactivin inhibits RANKL-induced osteolysis in vivo and this effect is CD44-dependent. Overall, our data indicate that Osteoactivin is a negative regulator of osteoclastogenesis in vitro and in vivo and that this process is regulated through CD44 and ERK activation.