Activation of NF-κB leads to expression of ample genes that regulate inflammatory and osteoclastogenic responses. The process is facilitated by induction of IκB kinase (IKK) complex that phosphorylates IκB and leads to its dissociation from the NF-κB complex, thus permitting activation of NF-κB. The IKK complex contains primarily IKKα, IKKβ, and the regulatory kinase IKKγ, also known as NEMO. NEMO regulates the IKK complex activity through its binding to carboxyl-terminal region of IKKα and IKKβ, termed NEMO-binding domain (NBD). In this regard, a cell-permeable NBD peptide has been shown to block association of NEMO with the IKK complex and inhibit activation of NF-κB. Given the pivotal role of cytokine-induced NF-ΚB in osteoclastogenesis and inflammatory bone loss, we deduced that cell-permeable TAT-NBD peptide may hinder osteoclastogenesis and bone erosion in inflammatory arthritis. Using NBD peptides, we show that wild type, but not mutant, NBD blocks IKK activation and reduces cytokine-induced promoter and DNA binding activities of NF-κB and inhibits cytokine-induced osteoclast formation by osteoclast precursors. Consistent with the key role of NF-κB in osteo-inflammatory responses in vivo, wild type TAT-NBD administered into mice prior to induction of inflammatory arthritis efficiently block in vivo osteoclastogenesis, inhibits focal bone erosion, and ameliorates inflammatory responses in the joints of arthritic mice. The mutant NBD peptide fails to exert these functions. These results provide strong evidence that IKKs are potent regulators of cytokine-induced osteoclastogenesis and inflammatory arthritis. More importantly, blockade of NEMO assembly with the IKK complex is a viable strategy to avert inflammatory osteolysis.