Integrin engagement induces a cascade of signaling pathways that include tyrosine phosphorylation of numerous proteins that lead to modulation of the actin cytoskeleton. Src is a major intracellular mediator of integrin-dependent functions, but the mechanism(s) by which Src is regulated in response to integrin signals is not fully understood. Here, we demonstrate an important role for phospholipase C gamma 2 (PLCgamma2) in Src activation in the osteoclast. Through analysis of primary cells from PLCgamma2(-/-) mice, PLCgamma2 was found to be an important regulator of alpha(v)beta(3) integrin-mediated bone osteoclast cell adhesion, migration, and bone resorption. Adhesion-induced PYK2 and Src phosphorylation is decreased in the absence of PLCgamma2, and the interaction of Src with beta(3) integrin and PYK2 is dramatically reduced. Importantly, PLCgamma2 was found to be required for proper localization of Src to the sealing actin ring, and this function required both its catalytic activity and adapter domains. Based on these results, we propose that PLCgamma2 influences Src activation by mediating the localization of Src to the integrin complex and thereby regulating integrin-mediated functions in the osteoclast.