The regulation of NFATc1 expression is important for osteoclast differentiation and function. Herein, we demonstrate that macrophage-colony-stimulating factor induces NFATc1 degradation via Cbl proteins in a Src kinase-dependent manner. NFATc1 proteins are ubiquitinated and rapidly degraded during late stage osteoclastogenesis, and this degradation is mediated by Cbl-b and c-Cbl ubiquitin ligases in a Src-dependent manner. In addition, NFATc1 interacts endogenously with c-Src, c-Cbl, and Cbl-b in osteoclasts. Overexpression of c-Src induces down-regulation of NFATc1, and depletion of Cbl proteins blocks NFATc1 degradation during late stage osteoclastogenesis. Taken together, our data provide a negative regulatory mechanism by which macrophage-colony-stimulating factor activates Src family kinases and Cbl proteins, and subsequently, induces NFATc1 degradation during osteoclast differentiation.