Lipopolysaccharide (LPS), a common bacteria-derived product, has long been recognized as a key factor implicated in periodontal bone loss. However, the precise cellular and molecular mechanisms by which LPS induces bone loss still remains controversial. Here, we show that LPS inhibited osteoclastogenesis from freshly isolated osteoclast precursors but stimulated osteoclast formation from those pretreated with RANKL in vitro in tissue culture dishes, bone slices, and a co-culture system containing osteoblasts, indicating that RANKL-mediated lineage commitment is a prerequisite for LPS-induced osteoclastogenesis. Moreover, the RANKL-mediated lineage commitment is long term, irreversible, and TLR4-dependent. LPS exerts the dual function primarily by modulating the expression of NFATc1, a master regulator of osteoclastogenesis, in that it abolished RANKL-induced NFATc1 expression in freshly isolated osteoclast precursors but stimulated its expression in RANKL-pretreated cells. In addition, LPS prolonged osteoclast survival by activating the Akt, NF-κB, and ERK pathways. Our current work has not only unambiguously defined the role of LPS in osteoclastogenesis but also has elucidated the molecular mechanism underlying its complex functions in osteoclast formation and survival, thus laying a foundation for future delineation of the precise mechanism of periodontal bone loss. © 2009 by The American Society for Biochemistry and Molecular Biology, Inc.