Bone formation by osteoblasts (OBs) and bone resorption by osteoclasts (OCLs) is a tightly coupled and balanced process. In chronic inflammatory diseases such as rheumatoid arthritis (RA), this balance is disturbed and OCL activity exceeds that of OBs, leading to net bone loss or osteoporosis. Glucocorticoids (GC) are frequently used in treatment of inflammatory diseases. However, the long term use of GCs can lead to the development of GC-induced osteoporosis (GIO). The p38 mitogen-activated protein kinases (MAPK) pathway is critical for the expression of many pro-inflammatory genes such as tumour necrosis factor (TNF). It is also involved in the differentiation and activation of OCLs. Termination of p38 MAPK signalling is partly dependent on dual specificity phosphatase 1 (DUSP1). DUSP1 expression is up-regulated by pro-inflammatory stimuli, providing a negative feedback loop to limit the inflammatory response. It is also up-regulated by GCs, and contributes to their anti-inflammatory properties. This study investigated the role of DUSP1 in two forms of bone loss. To test the hypothesis that induction of DUSP1 contribute to GIO, the bone phenotype of a Dusp1-/- mouse strain was first characterised, then the responses of bone to chronic GC administration were investigated. The involvement of DUSP1 in inflammatory bone loss was next examined using in vitro assays of OCL function, and collagen-induced arthritis (CIA), an experimental model of RA. Dusp1-/- OCLs displayed enhanced responses to pro-inflammatory stimuli in vitro. Furthermore, Dusp1-/- mice showed more rapid development and more severe arthritis and responses to GC were decreased compared to controls. The exacerbated disease in Dusp1-/- mice was accompanied by increased inflammatory infiltration, activation of OCLs and articular bone ersoion. There was also evidence of increased expression of interleukin 17 (IL-17), a cytokine that has been implicated in inflammatory and auto-immune diseases. These observations highlight a role of DUSP1 as an important negative regulator of inflammatory osteolysis and as a mediator of therapeutic effects of GCs in CIA.