Tumor necrosis factor (TNF)-related activation-induced cytokine (TRANCE) induces osteoclast formation from monocyte/macrophage lineage cells via various transcription factors, including the Mi transcription factor (Mitf). Here, we show that inhibitors of differentiation/DNA binding (Ids), helix-loop-helix (HLH) transcription factors, negatively regulate TRANCE-induced osteoclast differentiation. Expression levels of Id1, Id2, and Id3 genes are significantly reduced by TRANCE during osteoclastogenesis. Interestingly, overexpression of the 3 Id genes in bone marrow-derived monocyte/macrophage lineage cells (BMMs) inhibits the formation of tartrate-resistant acid phosphatase (TRAP)-positive multinuclear osteoclasts, but it does not alter the ability of BMMs to either phagocytose or differentiate into dendritic cells (DCs). Overexpression of Id2 in BMMs attenuates the gene induction of nuclear factor of activated T cells c1 (NFATc1) and osteoclastassociated receptor (OSCAR) during TRANCE-mediated osteoclastogenesis. Furthermore, Id proteins interact with Mitf, a basic HLH (bHLH) transcription factor, and inhibit its transactivation of OSCAR, which is a costimulatory receptor expressed by osteoclast precursors, by attenuating the DNA binding ability of Mitf to the E-box site of the OSCAR promoter. Taken together, our results reveal both a new facet of negative regulation, mediated by Id proteins, as well as the mechanism whereby TRANCE signaling overcomes it, allowing osteoclastogenesis to proceed.