Prostaglandin E2 (PGE2) accumulates in inflamed periodontal tissue and induces RANKL/RANK/OPG signaling associated with bone resorption. Although oral epithelial cells maintain tissue homeostasis, the role of oral epithelial cells in RANKL regulation remains unknown. To investigate the epithelial mediators involved in regulating RANKL expression in PGE2-stimulated human mandibular bone-derived cells (HMBCs) and RANKL driven osteoclastic-cell activity. HMBCs were stimulated with 0.1 μM PGE2 for 24 h to increase RANKL expression. Concurrently, cells were treated with epithelial supernatant containing constitutively released or P.gingivalis Lipopolysaccharide (PgLPS)-stimulated epithelial mediators, or recombinant IFN-γ. Some cells were pretreated with an anti-IFN-γ antibody before PGE2 stimulation. The expression of RANKL, OPG, and inflammation-related cytokines was assessed by quantitative PCR, and proteins levels were evaluated by ELISA and western blot. THP-1 human monocytes and HMBCs were cocultured to determine the ability of HMBCs to drive THP-1 differentiation into osteoclast-like cells. Osteoclast function was determined using a bone resorption pit assay. PGE2 significantly increased RANKL mRNA expression and RANKL protein in HMBCs dose-dependently, however, the OPG protein levels remained similar. Epithelial cells constitutively released IFN-γ, which was substantially increased by PgLPS. HMBCs treated with epithelial supernatant or recombinant IFN-γ, concurrently with PGE2 stimulation, reduced RANKL, but not OPG, expression similar to baseline. In contrast, the anti-IFN-γ antibody reversed the effect of the epithelial mediators on RANKL expression. THP-1 osteoclast activity increased when cocultured with PGE2-stimulated HMBCs. However, epithelial-derived IFN-γ decreased PGE2-induced RANKL expression in HmBCs, resulting in decreased THP-1-derived osteoclast activity. PGE2 stimulation significantly increases RANKL expression in HMBCs. However, recombinant IFN-γ, or IFN-γ derived from oral epithelial cells, suppresses RANKL expression at both the mRNA and protein level. Therefore, oral epithelial cells, by releasing IFN-γ, suppress RANKL upregulation in HMBCs and reduce osteoclast activity.