Aryl hydrocarbon receptor (AhR) is a ligand-activated transcription factor that plays a crucial role in bone remodeling through altering the interplay between bone-forming osteoblasts and bone-resorbing osteoclasts. While effects of AhR signaling in osteoblasts are well understood, the role and mechanism of AhR signaling in regulating osteoclastogenesis is not widely understood. AhR, when binding with exogenous ligands (environmental pollutants such as polycylic aryl hydrocarbon (PAH), dioxins) or endogenous ligand indoxyl-sulfate (IS), has dual functions that are mediated by the nature of the binding ligand, binding time, and specific pathways of distinct ligands. In this review, AhR is discussed with a focus on (i) the role of AhR in osteoclast differentiation and function and (ii) the mechanisms of AhR signaling in inhibiting or promoting osteoclastogenesis. These findings facilitate an understanding of the role of AhR in the functional regulation of osteoclasts and in osteoclast-induced bone destructive conditions such as rheumatoid arthritis and cancer.