Myostatin (also known as growth and differentiation factor 8) is a secreted member of the transforming growth factor-β (TGF-β) family that is mainly expressed in skeletal muscle, which is also its primary target tissue. Deletion of the myostatin gene (Mstn) in mice leads to muscle hypertrophy, and animal studies support the concept that myostatin is a negative regulator of muscle growth and regeneration. However, myostatin deficiency also increases bone formation, mainly through loading-associated effects on bone. Here we report a previously unknown direct role for myostatin in osteoclastogenesis and in the progressive loss of articular bone in rheumatoid arthritis (RA). We demonstrate that myostatin is highly expressed in the synovial tissues of RA subjects and of human tumor necrosis factor (TNF)-α transgenic (hTNFtg) mice, a model for human RA. Myostatin strongly accelerates receptor activator of nuclear factor κB ligand (RANKL)-mediated osteoclast formation in vitro through transcription factor SMAD2-dependent regulation of nuclear factor of activated T-cells (NFATC1). Myostatin deficiency or antibody-mediated inhibition leads to an amelioration of arthritis severity in hTNFtg mice, chiefly reflected by less bone destruction. Consistent with these effects in hTNFtg mice, the lack of myostatin leads to increased grip strength and less bone erosion in the K/BxN serum-induced arthritis model in mice. The results strongly suggest that myostatin is a potent therapeutic target for interfering with osteoclast formation and joint destruction in RA.