Cancer-induced bone disease results in bone destruction, pathological fractures, and pain. We hypothesized that the inhibition of the proteasome–ubiquitin system in osteoclasts could abolish the receptor activator of NF-κB ligand (RANKL) mediated osteoclast differentiation and function, since RANKL-mediated downstream signaling plays a crucial role in osteoclast life cycle. In this study, we examined the effects of the proteasome inhibitors MG-132 and MG-262 on RANKL-induced osteoclast differentiation and function. Osteoclast precursors from peripheral blood mononuclear cells were cultured in the presence of RANKL and M-CSF. Osteoclasts were identified as multi-nucleated TRAP-positive cells. Osteoclast function was quantified with the extent of dentine resorption and TRAP activity in culture supernatants. For the evaluation of the effects of proteasome inhibitors towards osteoclastogenesis, sub-apoptotic concentrations of MG-132 and MG-262 were used. Effects on NF-κB were obtained in treated and untreated osteoclasts. MG-132 and MG-262 inhibit both osteoclast differentiation and osteoclast function. 0.01μM MG-132 induced a 3.2-fold (P=0.004) and 0.001μM MG-262 a 3.3-fold (P=0.004) reduction of osteoclast differentiation, respectively. The resorption capacity was decreased 2.6- and 11.1-fold (P=0.003) by treatment with 0.01 and 0.1μM MG-132, and 14.2- and 16.6-fold (P=0.003) by 0.001 and 0.01μM MG-262, respectively. This decrease correlated with the extent of NF-κB binding capacity. In conclusion, this study shows for the first time that proteasome inhibitors act on osteoclast development and function at low concentrations and should be considered as potential drugs for the treatment of cancer-induced osteolytic bone disease.