Abstract Cbl proteins are multifunctional adaptor molecules that modulate cellular activity by targeting the ubiquitylating system, endocytic complexes, and other effectors to a wide variety of regulatory proteins, especially activated receptor and nonreceptor tyrosine kinases. Cbl and Cbl-b perform unique functions in various cells, in addition to redundant functions that are required for embryonic development. We previously showed that eliminating Cbl impaired osteoclast motility, which modestly delayed embryonic bone development. We now report that Cbl-b−/− mice are osteopenic, because of increased bone resorption with little compensating increase in bone formation. In vitro bone-resorbing activity and differentiation of osteoclast-like cells (OCLs) were increased, as were some RANKL-induced signaling events (activation of NF-κB and the mitogen-activated protein kinases extracellular signal-regulated kinase [ERK] and p38), suggesting that specific RANKL-activated mechanisms contribute to the increased rate of differentiation and bone-resorbing activity. Re-expressing Cbl-b in Cbl-b−/− OCLs normalized the increased bone-resorbing activity and overexpressing Cbl-b in wildtype OCLs inhibited bone resorption. Cbl was without effect in either wildtype or Cbl-b−/− OCLs. Functional tyrosine kinase binding (TKB) and RING finger domains were required for the rescue by Cbl-b. Thus, both Cbl and Cbl-b perform regulatory functions in osteoclasts that are unique to one or the other protein (i.e., functions that cannot be compensated by the other homolog). One of Cbl-b's unique functions in osteoclasts is to downregulate bone resorption.