Activating transcription factor 4 (ATF4) is a critical transcription factor for osteoblast (OBL) function and bone formation; however, a direct role in osteoclasts (OCLs) has not been established. Here, we targeted expression of ATF4 to the OCL lineage using the Trap promoter or through deletion of Atf4 in mice. OCL differentiation was drastically decreased in Atf4-/- bone marrow monocyte (BMM) cultures and bones. Coculture of Atf4-/- BMMs with WT OBLs or a high concentration of RANKL failed to restore the OCL differentiation defect. Conversely, Trap-Atf4-tg mice displayed severe osteopenia with dramatically increased osteoclastogenesis and bone resorption. We further showed that ATF4 was an upstream activator of the critical transcription factor Nfatc1 and was critical for RANKL activation of multiple MAPK pathways in OCL progenitors. Furthermore, ATF4 was crucial for M-CSF induction of RANK expression on BMMs, and lack of ATF4 caused a shift in OCL precursors to macrophages. Finally, ATF4 was largely modulated by M-CSF signaling and the PI3K/AKT pathways in BMMs. These results demonstrate that ATF4 plays a direct role in regulating OCL differentiation and suggest that it may be a therapeutic target for treating bone diseases associated with increased OCL activity.