Tumor necrosis factor receptor-associated factor 6 (TRAF6), the crucial adaptor molecule of receptor activator of NF-kappaB (RANK), plays an essential role in governing the formation of multi-nucleated osteoclasts. TRAF6 is a RING-dependent ubiquitin (Ub) ligase that in conjunction with Ubc13/Uev1A catalyzes its own auto-ubiquitination via Lys63-linked poly-Ub chains. While the receptor-adaptor function of TRAF6 in RANK signaling is well understood, the significance of its Ub ligase activity in this process remains largely unknown. In this study, we show that retroviral expression of TRAF6, but not a RING mutant of TRAF6 was able to rescue TRAF6-deficient monocytes for the activation of IKK and osteoclast differentiation by RANKL. Furthermore, a catalytically inactive Ubc13 or stable knockdown of Ubc13 significantly prevents RANK-mediated TRAF6 ubiquitination and NF-kappaB and JNK activation. These data establish a signaling cascade in which regulated Lys63-linked TRAF6 auto-ubiquitination is the critical upstream mediator of osteoclast differentiation.