Cardiotrophin (CT‐1) signals through gp130 and the LIF receptor (LIFR) and plays a major role in cardiac, neurological, and liver biology. We report here that CT‐1 is also expressed within bone in osteoclasts and that CT‐1 is capable of increasing osteoblast activity and mineralization both in vitro and in vivo. Furthermore, CT‐1 stimulated CAAT/enhancer‐binding protein‐δ (C/EBPδ) expression and runt‐related transcription factor 2 (runx2) activation. In neonate CT‐1^−/− mice, we detected low bone mass associated with reduced osteoblasts and many large osteoclasts, but increased cartilage remnants within the bone, suggesting impaired resorption. Cultured bone marrow (BM) from CT‐1^−/− mice generated many oversized osteoclasts and mineralized poorly compared with wildtype BM. As the CT‐1^−/− mice aged, the reduced osteoblast surface (ObS/BS) was no longer detected, but impaired bone resorption continued resulting in an osteopetrotic phenotype in adult bone. CT‐1 may now be classed as an essential osteoclast‐derived stimulus of both bone formation and resorption.