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Background: Bone destruction is one of many severe complications that occurs in patients with rheumatoid arthritis (RA) and current therapies are unable to cure this manifestation. This study here aims to determine whether GMSC can directly inhibit osteoclast formation and eventually attenuate osteoclastogenesis and bone erosion in an inflammatory milieu., Method: GMSC were co-cultured with osteoclast precursors with or without CD39 inhibitor, CD73 inhibitor or adenosine receptors inhibitors pretreatment and osteoclast formation were evaluated in vitro. 2×10^6 GMSC per mouse were transferred to CIA mice and pathology scores, the frequency of osteoclasts, bone erosion in joints were assessed in vivo., Finding: GMSC but not control cells, markedly suppressed human or mice osteoclastogenesis in vitro. GMSC treatment also resulted in a dramatically decreased level of NF-κB p65/p50 in osteoclasts in vitro. Infusion of GMSC to CIA significantly attenuated the severity of arthritis, pathology scores, frequency of osteoclasts, particularly bone erosion, as well as a decreased expression of RANKL in synovial tissues in vivo. Blockade of CD39/CD73 or adenosine receptors has significantly abrogated the suppressive ability of GMSC in vitro and therapeutic effect of GMSC on bone erosion during CIA in vivo., Interpretation: GMSC inhibit osteoclast formation in vitro and in vivo partially via CD39-CD73-adenosine signals. Manipulation of GMSC may have a therapeutic implication on rheumatoid arthritis and other bone erosion related diseases. FUND: This study was supported by grants from the National Key R&D Program of China (2017YFA0105801 to F.H); the Zhujiang Innovative and Entrepreneurial Talent Team Award of Guangdong Province (2016 ZT 06S 252 to F·H) and National Institutes of Health (R01 AR059103, R61 AR073409 and NIH Star Award to S.G.Z)., (Copyright © 2019 The Authors. Published by Elsevier B.V. All rights reserved.)