The balance between osteoclast and osteoblast activity is central for maintaining the integrity of bone homeostasis. Here we show that mice lacking dendritic cell specific transmembrane protein (DC-STAMP), an essential molecule for osteoclast cell-cell fusion, exhibited impaired bone resorption and upregulation of bone formation by osteoblasts, which do not express DC-STAMP, which led to increased bone mass. On the contrary, DC-STAMP over-expressing transgenic (DC-STAMP-Tg) mice under the control of an actin promoter showed significantly accelerated cell-cell fusion of osteoclasts and bone resorption, with decreased osteoblastic activity and bone mass. Bone resorption and formation are known to be regulated in a coupled manner, whereas DC-STAMP regulates bone homeostasis in an un-coupled manner. Thus our results indicate that inhibition of a single molecule provides both decreased osteoclast activity and increased bone formation by osteoblasts, thereby increasing bone mass in an un-coupled and a tissue specific manner.