Osteoclasts are multinucleated myeloid lineage cells formed in response to macrophage colony‐stimulating factor (M‐CSF) and receptor activator of NF‐κB ligand (RANKL) by fusion of bone marrow–derived precursors that circulate in the blood and are attracted to sites of bone resorption in response to factors, such as sphingosine‐1 phosphate signaling. Major advances in understanding of the molecular mechanisms regulating osteoclast functions have been made in the past 20 years, mainly from mouse and human genetic studies. These have revealed that osteoclasts express and respond to proinflammatory and anti‐inflammatory cytokines. Some of these cytokines activate NF‐κB and nuclear factor of activated T cells, cytoplasmic 1 (NFATc1) signaling to induce osteoclast formation and activity and also regulate communication with neighboring cells through signaling proteins, including ephrins and semaphorins. Osteoclasts also positively and negatively regulate immune responses and osteoblastic bone formation. These advances have led to development of new inhibitors of bone resorption that are in clinical use or in clinical trials; and more should follow, based on these advances. This article reviews current understanding of how bone resorption is regulated both positively and negatively in normal and pathologic states. © 2013 American Society for Bone and Mineral Research.