IL-33 is a new member of the IL-1 family, which plays a crucial role in inflammatory response, enhancing the differentiation of dendritic cells and alternatively activated macrophages (AAM). Based on the evidence of IL-33 expression in bone, we hypothesized that IL-33 may shift the balance from osteoclast to AAM differentiation and protect from inflammatory bone loss. Using transgenic mice overexpressing human TNF, which develop spontaneous joint inflammation and cartilage destruction, we show that administration of IL-33 or an IL-33R (ST2L) agonistic Ab inhibited cartilage destruction, systemic bone loss, and osteoclast differentiation. Reconstitution of irradiated hTNFtg mice with ST2(-/-) bone marrow led to more bone loss compared with the chimeras with ST2(+/+) bone marrow, demonstrating an important endogenous role of the IL-33/ST2L pathway in bone turnover. The protective effect of IL-33 on bone was accompanied by a significant increase of antiosteoclastogenic cytokines (GM-CSF, IL-4, and IFN-γ) in the serum. In vitro IL-33 directly inhibits mouse and human M-CSF/receptor activator for NF-κB ligand-driven osteoclast differentiation. IL-33 acts directly on murine osteoclast precursors, shifting their differentiation toward CD206(+) AAMs via GM-CSF in an autocrine fashion. Thus, we show in this study that IL-33 is an important bone-protecting cytokine and may be of therapeutic benefit in treating bone resorption.