ABSTRACT   Lysosomal Ca2+ emerges as a critical component of receptor-evoked Ca2+ signaling and plays a crucial role in many lysosomal and physiological functions. Lysosomal Ca2+ release is mediated by the transient receptor potential (TRP) family member TRPML1, mutations that cause the lysosomal storage disease mucolipidosis type 4. Lysosomes play a key role in osteoclast function. However, nothing is known about the role of lysosomal Ca2+ signaling in osteoclastogenesis and bone metabolism. In this study, we addressed this knowledge gap by studying the role of lysosomal Ca2+ signaling in osteoclastogenesis, osteoclast and osteoblast functions, and bone homeostasis in vivo. We manipulated lysosomal Ca2+ signaling by acute knockdown of TRPML1, deletion of TRPML1 in mice, pharmacological inhibition of lysosomal Ca2+ influx, and depletion of lysosomal Ca2+ storage using the TRPML agonist ML-SA1. We found that knockdown and deletion of TRPML1, although it did not have an apparent effect on osteoblast differentiation and bone formation, markedly attenuated osteoclast function, RANKL-induced cytosolic Ca2+ oscillations, inhibited activation of NFATc1 and osteoclastogenesis-controlling genes, suppressed the formation of tartrate-resistant acid phosphatase (TRAP)-positive multinucleated cells (MNCs), and markedly reduced the differentiation of bone marrow–derived macrophages into osteoclasts. Moreover, deletion of TRPML1 resulted in enlarged lysosomes, inhibition of lysosomal secretion, and attenuated the resorptive activity of mature osteoclasts. Notably, depletion of lysosomal Ca2+ with ML-SA1 similarly abrogated RANKL-induced Ca2+ oscillations and MNC formation. Deletion of TRPML1 in mice reduced the TRAP-positive bone surfaces and impaired bone remodeling, resulting in prominent osteopetrosis. These findings demonstrate the essential role of lysosomal Ca2+ signaling in osteoclast differentiation and mature osteoclast function, which play key roles in bone homeostasis. © 2016 American Society for Bone and Mineral Research.