AbstractBone remodelling is mediated by orchestrated communication between osteoclasts and osteoblasts which, in part, is regulated by coupling and anti‐coupling factors. Amongst formally known anti‐coupling factors, Semaphorin 4D (Sema4D), produced by osteoclasts, plays a key role in downmodulating osteoblastogenesis. Sema4D is produced in both membrane‐bound and soluble forms; however, the mechanism responsible for producing sSema4D from osteoclasts is unknown. Sema4D, TACE and MT1‐MMP are all expressed on the surface of RANKL‐primed osteoclast precursors. However, only Sema4D and TACE were colocalized, not Sema4D and MT1‐MMP. When TACE and MT1‐MMP were either chemically inhibited or suppressed by siRNA, TACE was found to be more engaged in shedding Sema4D. Anti‐TACE‐mAb inhibited sSema4D release from osteoclast precursors by ~90%. Supernatant collected from osteoclast precursors (OC‐sup) suppressed osteoblastogenesis from MC3T3‐E1 cells, as measured by alkaline phosphatase activity, but OC‐sup harvested from the osteoclast precursors treated with anti‐TACE‐mAb restored osteoblastogenesis activity in a manner that compensates for diminished sSema4D. Finally, systemic administration of anti‐TACE‐mAb downregulated the generation of sSema4D in the mouse model of critical‐sized bone defect, whereas local injection of recombinant sSema4D to anti‐TACE‐mAb‐treated defect upregulated local osteoblastogenesis. Therefore, a novel pathway is proposed whereby TACE‐mediated shedding of Sema4D expressed on the osteoclast precursors generates functionally active sSema4D to suppress osteoblastogenesis.