Homeostatic bone remodelling becomes disturbed in a variety of pathologic conditions that affect the skeleton, including inflammatory diseases. Rheumatoid arthritis is the prototype of an inflammatory arthritis characterised by chronic inflammation, progressive cartilage destruction and focal bone erosions and is a prime example for a disease with disturbed bone homeostasis. The inflammatory milieu favours the recruitment and activation of osteoclasts, which have been found to be the cells that are primarily responsible for bone erosions in many animal models of inflammatory arthritis. Among the inflammatory modulators, members of the transforming growth factor (TGF)-β super family are shown to be important regulators in osteoclastogenesis with Smad-mediated signalling being crucial for inducing osteoclast differentiation. These findings have opened a new field for exploring mechanisms of osteoclast differentiation under inflammatory conditions. Recent studies have shown that the TGF-β superfamily members TGF-β1, myostatin and activin A directly regulate osteoclast differentiation through mechanisms that depend on the RANKL-RANK interplay. These growth factors transduce their signals through type I and II receptor serine/threonine kinases, thereby activating the Smad pathway. In this review, we describe the impact of inflammation-induced Smad signalling in osteoclast development and subsequently bone erosion in rheumatoid arthritis.