Brazilin isolated from Caesalpinia sappan has long been known as a natural red pigment. Our study evaluated the inhibitory effect of brazilin on osteoclast differentiation and investigated its mechanism of action. Our results demonstrated that brazilin inhibited receptor activator of nuclear factor kappa-B ligand (RANKL)-mediated osteoclast differentiation in RAW264.7 cells in a dose-dependent manner, without any evidence of cytotoxicity. The mRNA expression of tartrate-resistant acid phosphatase (TRAP), nuclear factor of activated T-cells, cytoplasmic 1 (NFATc1), matrix metalloproteinase 9 (MMP-9), and cathepsin K in RANKL-treated RAW264.7 cells was inhibited by brazilin treatment. Brazilin also decreased RANKL-induced expression of inflammatory mediator genes such as inducible nitric oxide synthase, iNOS; cyclooxygenase (COX)-2, tumor necrosis factor (TNF)-α, and interleukin (IL)-6 and inhibited extracellular signal-regulated kinases (ERK) and nuclear factor kappa-light-chain-enhancer of activated B cell (NF-κB) p65 phosphorylation in RANKL-stimulated RAW264.7 cells. A lipopolysaccharide (LPS)-induced osteoporosis study was also performed to assess the effects of brazilin in vivo. Micro-computed tomography (CT) analysis of the femurs showed that LPS treatment causes bone loss in mice, but it was significantly attenuated after co-treatment with brazilin (100 mg/kg). Therefore, brazilin may have therapeutic potential in preventing bone loss.