There is considerable interest in tankyrase because of its potential use in cancer therapy. Tankyrase catalyzes the ADP-ribosylation of a variety of target proteins and regulates various cellular processes. The anti-cancer effects of tankyrase inhibitors are mainly due to their suppression of Wnt signaling and inhibition of telomerase activity, which are mediated by AXIN and TRF1 stabilization, respectively. In this review, we describe the underappreciated effects of another substrate, SH3 domain-binding protein 2 (SH3BP2). Specifically, SH3BP2 is an adaptor protein that regulates intracellular signaling pathways. Additionally, in the human genetic disorder cherubism, the gain-of-function mutations in SH3BP2 enhance osteoclastogenesis. The pharmacological inhibition of tankyrase in mice induces bone loss through the accumulation of SH3BP2 and the subsequent increase in osteoclast formation. These findings reveal the novel functions of tankyrase influencing bone homeostasis, and imply that tankyrase inhibitor treatments in a clinical setting may be associated with adverse effects on bone mass.