The Mitochondrial-derived peptide MOTS-c has recently been reported as a 16-amino acid peptide regulating metabolism and homeostasis in different cells. However, its effects on immune cells and bone metabolism are rarely reported. Here we demonstrate that MOTS-c treatment in ultra-high molecular weight polyethylene (UHMWPE) particle-induced osteolysis mouse model alleviated bone erosion and inflammation. MOTS-c increased osteoprotegerin (OPG)/ receptor activator of nuclear factor kappa-B ligand (RANKL) ratio in osteocytes, leading to inhibition of osteoclastogenesis. In primary bone marrow macrophages (BMMs) MOTS-c alleviated STAT1 and NF-κB phosphorylation triggered by UHMWPE particles. Promoting ROS production or suppressing peroxisome proliferator-activated receptor γ (PPARγ) coactivator-1α (PGC-1α) by adenosine 5'-monophosphate (AMP)-activated protein kinase (AMPK) repression blocked these anti-inflammatory effects of MOTS-c treatment. Taken together, these findings provide evidence that the small peptide inhibits osteoclastogenesis by regulating osteocyte OPG/RANKL secretion and suppressing inflammation via restraining NF-κB and STAT1 pathway. Moreover, its effects on NF-κB activation is dependent on the AMPK-PGC-1α-ROS axis, suggesting its potential use in osteolysis and other inflammation disorders.