Bone remodeling is central to maintaining the integrity of the skeletal system, wherein the developed bone is constantly renewed by the balanced action of osteoblastic bone formation and osteoclastic bone resorption. In the present study, we demonstrate a novel function of the Stat1 transcription factor in the regulation of bone remodeling. In the bone of the Stat1-deficient mice, excessive osteoclastogenesis is observed, presumably caused by a loss of negative regulation of osteoclast differentiation by interferon (IFN)-beta. However, the bone mass is unexpectedly increased in these mice. This increase is caused by excessive osteoblast differentiation, wherein Stat1 function is independent of IFN signaling. Actually, Stat1 interacts with Runx2 in its latent form in the cytoplasm, thereby inhibiting the nuclear localization of Runx2, an essential transcription factor for osteoblast differentiation. The new function of Stat1 does not require the Tyr 701 that is phosphorylated when Stat1 becomes a transcriptional activator. Our study provides a unique example in which a latent transcription factor attenuates the activity of another transcription factor in the cytoplasm, and reveals a new regulatory mechanism in bone remodeling.