Cbl is an adaptor protein and an E3 ligase that plays both positive and negative roles in several signaling pathways that affect various cellular functions. Tyrosine 737 is unique to Cbl and is phosphorylated by Syk and Src family kinases. Phosphorylated Cbl Tyr 737 creates a binding site for the p85 regulatory subunit of PI3K, which also plays an important role in the regulation of bone resorption by osteoclasts. To investigate the role of Cbl-PI3K interaction in bone homeostasis, we examined the knock-in mice (Cbl YF/YF ) in which the PI3K binding site in Cbl is ablated due to the mutation in the regulatory tyrosine. We report that in Cbl YF/YF mice, despite increased numbers of osteoclasts, bone volume is increased due to defective osteoclast function. Additionally, in ex vivo cultures, mature Cbl YF/YF osteoclasts showed an increased ability to survive in the presence of RANKL due to delayed onset of apoptosis. RANKL-mediated signaling is perturbed in Cbl YF/YF osteoclasts, and most interestingly, AKT phosphorylation is up-regulated, suggesting that the lack of PI3K sequestration by Cbl results in increased survival and decreased bone resorption. Cumulatively, these in vivo and in vitro results show that, on one hand, binding of Cbl to PI3K negatively regulates osteoclast differentiation, survival, and signaling events (e.g. AKT phosphorylation), whereas on the other hand it positively influences osteoclast function.Bone is a dynamic tissue that maintains both physical integrity and calcium homeostasis and is continuously remodeled throughout the lifetime of mammals. Bone integrity is maintained by the coordinated regulation of two cell types, osteoblasts and osteoclasts. Osteoblasts are of mesenchymal origin and are responsible for mineralizing the bone matrix. Osteoclasts are of hematopoietic origin and are highly specialized multinucleated cells capable of resorbing bone during the normal and pathological conditions (1). Cbl and Cbl-b are mammalian members of a family of adaptor proteins with E3 ubiquitin ligase activity that down-regulate signaling from tyrosine kinases by targeting the ubiquitylating machinery to the activated kinases and associated proteins (2, 3). Cbl proteins, being multivalent adaptors, also promote assembling of signaling complexes downstream of several receptors, including the macrophage colony-stimulating factor receptor (c-Fms), receptor activator of NFB (RANK), 2 and integrins (2). Tyrosine phosphorylation of Cbl upon receptor activation is one of the most common signaling phenomena shown to be crucial not only for its E3 ubiquitin ligase activity but also for its adaptor effects. All Cbl family members, including Cbl and Cbl-b, share a tyrosine kinase binding domain and RING domain that binds to ubiquitin-conjugating enzymes (E2s). The tyrosine kinase binding domain and the RING are highly conserved N-terminal halves of the Cbl family proteins. The C-terminal halves of Cbl and Cbl-b are much less conserved, with significant homology found primarily in short proline-rich motifs...