Osteogenic-angiogenic coupling is promoted by the Hypoxia-Inducible Factor 1-alpha (HIF-1α) transcription factor, provoking interest in HIF activation as a therapeutic strategy to improve osteoblast mineralisation and treat pathological osteolysis. However, HIF also enhances the bone resorbing activity of mature osteoclasts. It is therefore essential to determine the full effect(s) of HIF on both the formation and bone-resorbing function of osteoclasts in order to understand how they might respond to such a strategy. Expression of HIF-1α mRNA and protein increased during osteoclast differentiation from CD14+ monocytic precursors, additionally inducing expression of the HIF-regulated glycolytic enzymes. However HIF-1α siRNA only moderately affected osteoclast differentiation, accelerating fusion of precursor cells. HIF induction by inhibition of the regulatory prolyl-4-hydroxylase (PHD) enzymes reduced osteoclastogenesis, but was confirmed to enhance bone resorption by mature osteoclasts. Phd2(+/-) murine osteoclasts also exhibited enhanced bone resorption, associated with increased expression of resorption-associated Acp5, in comparison with wild-type cells from littermate controls. Phd3(-/-) bone marrow precursors displayed accelerated early fusion, mirroring results with HIF-1α siRNA. In vivo, Phd2(+/-) and Phd3(-/-) mice exhibited reduced trabecular bone mass, associated with reduced mineralisation by Phd2(+/-) osteoblasts. This data indicates that HIF predominantly functions as a regulator of osteoclast-mediated bone resorption, with little effect on osteoclast differentiation. Inhibition of HIF might therefore represent an alternative strategy to treat diseases characterised by pathological levels of osteolysis.