Interleukin-3 (IL-3) is produced under various pathological conditions and is thought to be involved in the pathogenesis of inflammatory diseases; however, its function in bone homeostasis under normal conditions or nature of the downstream molecular targets remains unknown. Here we examined the effect of IL-3 on osteoclast differentiation from mouse and human bone marrow-derived macrophages (BMMs). Although IL-3 can induce osteoclast differentiation of multiple myeloma bone marrow cells, IL-3 greatly inhibited osteoclast differentiation of human BMMs isolated from healthy donors. These inhibitory effects of IL-3 were only observed at early time points (days 0 and 1). IL-3 inhibited the expression of c-Fos and NFATc1 in BMMs treated with RANKL. However, IL-3-mediated inhibition of osteoclast differentiation was not completely reversed by ectopic expression of c-Fos or NFATc1. Importantly, IL-3 induced inhibitor of DNA binding/differentiation (Id)1 in hBMMs, while Id2 were sustained during osteoclast differentiation of mBMMs treated with IL-3. Ectopic expression of NFATc1 in Id2-deficient BMMs completely reversed the inhibitory effect of IL-3 on osteoclast differentiation. Furthermore, inflammation-induced bone erosion was markedly inhibited by IL-3 administration. Taken together, our results suggest that IL-3 plays an inhibitory role in osteoclast differentiation by regulating c-Fos and Ids, and also exerts anti-bone erosion effects. J. Cell. Physiol. 227: 1851–1860, 2012. © 2011 Wiley Periodicals, Inc.