TNF receptor-associated factor 6 (TRAF6) associates with the cytoplasmic domain of receptor activator of NF-kappaB (RANK). This event is central to normal osteoclastogenesis. We discovered that TRAF6 also interacts with FHL2 (four and a half LIM domain 2), a LIM domain--only protein that functions as a transcriptional coactivator or corepressor in a cell-type--specific manner. FHL2 mRNA and protein are undetectable in marrow macrophages and increase pari passu with osteoclast differentiation in vitro. FHL2 inhibits TRAF6-induced NF-kappaB activity in wild-type osteoclast precursors and, in keeping with its role as a suppressor of TRAF6-mediated RANK signaling, TRAF6/RANK association is enhanced in FHL2-/- osteoclasts. FHL2 overexpression delays RANK ligand-induced (RANKL-induced) osteoclast formation and cytoskeletal organization. Interestingly, osteoclast-residing FHL2 is not detectable in naive wild-type mice, in vivo, but is abundant in those treated with RANKL and following induction of inflammatory arthritis. Reflecting increased RANKL sensitivity, osteoclasts generated from FHL2-/- mice reach maturation and optimally organize their cytoskeleton earlier than their wild-type counterparts. As a consequence, FHL2-/- osteoclasts are hyperresorptive, and mice lacking the protein undergo enhanced RANKL and inflammatory arthritis-stimulated bone loss. FHL2 is, therefore, an antiosteoclastogenic molecule exerting its effect by attenuating TRAF6-mediated RANK signaling.