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DC\u2010STAMP\u2212\/\u2212 mice have mild osteopetrosis and form mononuclear cells with limited resorption capacity. The identification of an <jats:styled-content>I<\/jats:styled-content>mmunoreceptor <jats:styled-content>T<\/jats:styled-content>yrosine\u2010based <jats:styled-content>I<\/jats:styled-content>nhibitory <jats:styled-content>M<\/jats:styled-content>otif (ITIM) on the cytoplasmic tail of DC\u2010STAMP suggested a potential signaling function. The absence of a known DC\u2010STAMP ligand, however, has hindered the elucidation of downstream signaling pathways. To address this problem, we engineered a light\u2010activatable DC\u2010STAMP chimeric molecule in which light exposure mimics ligand engagement that can be traced by downstream Ca<jats:sup>2+<\/jats:sup> signaling. Deletion of the cytoplasmic ITIM resulted in a significant elevation in the amplitude and duration of intracellular Ca<jats:sup>2+<\/jats:sup> flux. Decreased NFATc1 expression in DC\u2010STAMP\u2212\/\u2212 cells was restored by DC\u2010STAMP over\u2010expression. Multiple biological phenotypes including cell\u2013cell fusion, bone erosion, cell mobility, DC\u2010STAMP cell surface distribution, and NFATc1 nuclear translocation were altered by deletion of the ITIM and adjacent amino acids. In contrast, mutations on each of the tyrosine residues surrounding the ITIM showed no effect on DC\u2010STAMP function. Collectively, our results suggest that the ITIM on DC\u2010STAMP is a functional motif that regulates osteoclast differentiation through the NFATc1\/Ca<jats:sup>2+<\/jats:sup> axis. J. Cell. 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