The Cbl protein is a key player in macrophage colony-stimulating factor (M-CSF)-induced signaling. To examine the role of Cbl in M-CSF-mediated cellular events, we used CblYF/YF knockin mice in which the regulatory tyrosine 737, which when phosphorylated binds to the p85 subunit of phosphatidylinositol 3 kinase (PI3K), is substituted to phenylalanine. In ex vivo cultures, M-CSF and receptor activator of nuclear factor-κB ligand-mediated differentiation of bone marrow precursors from Cbl YF/YF mice generated increased number of osteoclasts; however, osteoclast numbers in CblYF/YF cultures were unchanged with increasing doses of M-CSF. We found that CblYF/YF osteoclasts have enhanced intrinsic ability to survive, and this response was further augmented upon exposure to M-CSF. Treatment of osteoclasts with M-CSF-induced actin reorganization and lamellipodia formation in wild-type osteoclasts; however, in CblYF/YF osteoclasts lamellipodia formation was compromised. Collectively, these results indicate that abrogation of the Cbl-PI3K interaction, although not affecting M-CSF-induced proliferation and differentiation of precursors, is required for regulation of survival and actin cytoskeletal reorganization of mature osteoclasts.