Abstract Osteoclasts are bone-resorbing cells that play an essential role in homeostatic bone remodeling and pathological bone erosion. Macrophage colony stimulating factor (M-CSF) is abundant in rheumatoid arthritis (RA). However, the role of M-CSF in arthritic bone erosion is not completely understood. Here, we show that M-CSF can promote osteoclastogenesis by triggering the proteolysis of c-FMS, a receptor for M-CSF, leading to the generation of FMS intracellular domain (FICD) fragments. Increased levels of FICD fragments positively regulated osteoclastogenesis but had no effect on inflammatory responses. Moreover, myeloid cell-specific FICD expression in mice resulted in significantly increased osteoclast-mediated bone resorption in an inflammatory arthritis model. The FICD formed a complex with DAP5, and the FICD/DAP5 axis promoted osteoclast differentiation by activating the MNK1/2/EIF4E pathway and enhancing NFATc1 protein expression. Moreover, targeting the MNK1/2 pathway diminished arthritic bone erosion. These results identified a novel role of c-FMS proteolysis in osteoclastogenesis and the pathogenesis of arthritic bone erosion.