The glycoprotein milk fat globule-epidermal growth factor factor 8 (MFG-E8) is expressed in several tissues and mediates diverse homeostatic functions. However, whether it plays a role in bone homeostasis has not been established. In this study, we show for the first time, to our knowledge, that osteoclasts express and are regulated by MFG-E8. Bone marrow-derived osteoclast precursors from MFG-E8-deficient (Mfge8^-/-) mice underwent increased receptor activator of NF-kB ligand-induced osteoclastogenesis, leading to enhanced resorption pit formation compared with wild-type controls. Consistently, exogenously added MFGE8 inhibited receptor activator of NF-kB ligand-induced osteoclastogenesis from mouse or human osteoclast precursors. Upon induction of experimental periodontitis, an oral inflammatory disease characterized by loss of bone support of the dentition, Mfge8^-/- mice exhibited higher numbers of osteoclasts and more bone loss than did wild-type controls. Accordingly, local microinjection of anti-MFG-E8 mAb exacerbated periodontal bone loss in wild-type mice. Conversely, microinjection of MFG-E8 inhibited bone loss in experimental mouse periodontitis. In comparison with wild-type controls, Mfge8^-/- mice also experienced >60% more naturally occurring chronic periodontal bone loss. In conclusion, MFG-E8 is a novel homeostatic regulator of osteoclasts that could be exploited therapeutically to treat periodontitis and perhaps other immunological disorders associated with inflammatory bone loss.