Neurofibromatosis type I (NF1) is a congenital disorder resulting from loss-of-function of the tumor suppressor gene, NF1, a GTPase-activating protein for p21ras. Fifty percent of NF1 patients have osseous manifestations including a high incidence of osteoporosis. Osteoclasts are specialized macrophage/monocyte lineage-derived cells that resorb bone and NF1 haploinsufficient osteoclasts have abnormal Ras-dependent bone resorption. Ras-regulated functions are in part mediated via the activation of small Rho family of GTPases including the Rac-GTPases. In the present study, we demonstrate that the Rho-GTPase Rac1 is a crucial Ras-mediated effector in Nf1 haploinsufficient (+/−) osteoclasts. Nf1+/− mice were intercrossed with conditional Rac1^flox/floxMxcre+ (Rac1−/−) mice to generate Nf1+/−; Rac1−/− mice. Genetic disruption of Rac1 restored the pathological increase in osteoclast progenitor cells in Nf1+/− mice and was sufficient to correct the increased Nf1+/− osteoclast motility and osteoclast belt formation, an f-actin structure observed in mature osteoclasts critical for bone resorption and lytic activity. Finally, we demonstrate that Nf1+/−; Rac1−/− osteoclasts have normalized Erk activation compared with Nf1+/− osteoclasts, a biochemical function critical for osteoclast formation, actin organization and motility. Collectively, these data demonstrate that Rac1 critically contributes to increased osteoclast function induced by haploinsufficiency of Nf1 and implicate Rac1 as a rational therapeutic target for osteoporosis.