Osteoclasts mediate bone resorption, which is critical for bone development, maintenance, and repair. Proper control of osteoclast development and function is important and deregulation of these processes may lead to bone disease, such as osteoporosis. Previous studies have shown that the cytosolic protein tyrosine phosphatase SHP‐1 acts as a suppressor of osteoclast differentiation and function, but putative inhibitory receptors that mediate recruitment and activation of SHP‐1 in osteoclasts have remained unknown. In the present study, we identify the SHP‐1‐recruiting inhibitory immunoreceptor signal regulatory protein (SIRP) α as a negative regulator of osteoclast activity. SIRPα is expressed by osteoclasts, and osteoclasts from mice lacking the SIRPα cytoplasmic tail and signaling capacity display enhanced bone resorption in vitro. Consequently, SIRPα‐mutant mice have a significantly reduced cortical bone mass. Fur‐thermore, osteoclasts from SIRPα‐mutant mice show an enhanced formation of actin rings, known to be instrumental in bone resorption. SIRPα mutation did not significantly affect osteoclast formation, implying that the role of SIRPα was limited to the regulation of mature osteoclast function. This identifies SIRPα as a bona fide inhibitory receptor that regulates the bone‐resorption activity and supports a concept in which osteoclast function is balanced by the signaling activities of activating and inhibitory immunoreceptors.—Van Beek, E. M., de Vries, T. J., Mulder, L., Schoenmaker, T., Hoeben, K. A., Matozaki, T., Langenbach, G. E. J., Kraal, G., Everts, V., van den Berg, T. K. Inhibitory regulation of osteoclast bone resorption by signal regulatory protein α. FASEB J. 23, 4081‐4090 (2009). www.fasebj.org