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Carbon monoxide (CO) has been shown to have remarkable therapeutic value at low dosage by suppressing inflammation via inhibitory effects on macrophages, which are also precursors of osteoclasts (OC). The objective of the present study was to determine whether CO limits bone loss through its effects on osteoclastogenesis. Intraperitoneal injection of CO-releasing molecule 2 (CORM2) into mice with reduced bone mass due to ovariectomy (OVX) resulted in significantly elevated bone mass. Increased serum levels of collagen-type I fragments, tartrate-resistant acid phosphatase 5b, and reactive oxygen species (ROS) due to OVX were also decreased when treated with CORM2. In vitro, CORM2 inhibited receptor activator of nuclear factor-κB ligand (RANKL)-induced OC formation without affecting bone resorption. CORM2 reduced long-lasting ROS levels and nuclear factor-κB (NF-κB) activation in response to RANKL. Inhibition of NADPH oxidase partially reduced the inhibitory effect of CO. CO induced increase of peroxiredoxin 1 (PRX1) in BMM. Down-regulation of PRX1 reduced the inhibitory effect of CO on OC formation and sustained the ROS levels induced by RANKL, suggesting that CO reduces generation of ROS and scavenges ROS to inhibit osteoclastogenesis. These data suggest that the inhibitory effect of CO on osteoclastogenesis is caused by impaired RANKL signaling through defective NF-κB activation and reduced levels of long-lasting ROS. These changes result in decreased bone loss. Our data highlight the potential utility of CO for ameliorating bone loss induced by loss of ovarian function.