Tumor necrosis factor receptor-associated factor 6 (TRAF6) is an essential component of the signaling complex that mediates osteoclastogenesis. As an adaptor protein of E3 ligase function, TRAF6 regulates NF-κB signaling via TAK1 and I-κB kinase (IKK) activation. Here, we investigated novel mechanisms by which TRAF6 signaling is regulated under receptor activator of nuclear factor-κB ligand (RANKL)-induced osteoclastogenesis. A yeast two-hybrid screen system identified cellular factors that interact with TRAF6. The interactions were confirmed by glutathione S-transferase pull-down and co-immunoprecipitation assays, followed by immuno-blotting. The role of TRAF6 in bone growth and remodeling was determined by osteoclast differentiation and bone-resorption pit assays. Regulatory mechanisms were examined by co-immunoprecipitation, immuno-blotting, real-time polymerase chain reaction, and luciferase reporter assays. We show that B-cell chronic lymphatic leukemia protein 3 (BCL3) interacts with TRAF6 through its ankyrin-repeat domain and inhibits osteoclastogenesis in bone marrow derived macrophages (BMDMs). Further, TRAF6 interacts with CYLD to mediate BCL3 deubiquitination, which facilitates the cytoplasmic accumulation of BCL3 and represses BCL3 and p50 complex-mediated cyclin D1 transcription. TRAF6 promotes RANKL-induced osteoclastogenesis by regulating novel non-canonical NF-κB signaling via BCL3 deubiquitination, indicating that BCL3 provides valuable insights into bone loss-associated diseases.