Previous studies have shown that transforming growth factor β (TGF‐β) promotes receptor activator of nuclear factor‐κB ligand (RANKL)–induced osteoclastogenesis. However, the underlying molecular mechanisms have not been elucidated. When TGF‐β signals were blocked either by a specific inhibitor of TGF‐β type 1 receptor kinase activity, SB431542, or by introducing a dominant‐negative mutant of TGF‐β type 2 receptor, RANKL‐induced osteoclastogenesis was almost completely suppressed. Blockade of Smad signaling by overexpression of Smad7 or c‐Ski markedly suppressed RANKL‐induced osteoclastogenesis, and retroviral induction of an activated mutant of Smad2 or Smad3 reversed the inhibitory effect of SB431542. Immunoprecipitation analysis revealed that Smad2/3 directly associates with the TRAF6‐TAB1‐TAK1 molecular complex, which is generated in response to RANKL stimulation and plays an essential role in osteoclast differentiation. TRAF6‐TAB1‐TAK1 complex formation was not observed when TGF‐β signaling was blocked. Analysis using deletion mutants revealed that the MH2 domain of Smad3 is necessary for TRAF6‐TAB1‐TAK1 complex formation, downstream signal transduction, and osteoclast formation. In addition, gene silencing of Smad3 in osteoclast precursors markedly suppressed RANKL‐induced osteoclast differentiation. In summary, TGF‐β is indispensable in RANKL‐induced osteoclastogenesis, and the binding of Smad3 to the TRAF6‐TAB1‐TAK1 complex is crucial for RANKL‐induced osteoclastogenic signaling. © 2011 American Society for Bone and Mineral Research.