Bone disease, characterized by the presence of lytic lesions and osteoporosis is the hallmark of multiple myeloma (MM). Stromal cell-derived factor 1α (SDF-1α) and its receptor, CXC chemokine receptor 4 (CXCR4), has been implicated as a regulator of bone resorption, suggesting that agents that can suppress SDF1α/CXCR4 signaling might inhibit osteoclastogenesis, a process closely linked to bone resorption. We, therefore, investigated whether gambogic acid (GA), a xanthone, could inhibit CXCR4 signaling and suppress osteoclastogenesis induced by MM cells. Through docking studies we predicted that GA directly interacts with CXCR4. This xanthone down-regulates the expression of CXCR4 on MM cells in a dose- and time-dependent manner. The down-regulation of CXCR4 was not due to proteolytic degradation rather GA suppresses CXCR4 mRNA expression by inhibiting nuclear factor-kappa B (NF-κB) DNA binding. This was further confirmed by quantitative chromatin immunoprecipitation (qChIP) assay, as GA inhibits p65 binding at CXCR4 promoter. GA suppressed SDF-1α-induced chemotaxis of MM cells and downstream signaling of CXCR4 by inhibiting phosphorylation of Akt, p38, and Erk1/2 in MM cells. GA abrogated the RANKL-induced differentiation of macrophages to osteoclasts in a dose- and time-dependent manner. In addition, we found that MM cells induced differentiation of macrophages to osteoclasts, and that GA suppressed this process. Importantly, suppression of osteoclastogenesis by GA was mediated through IL-6 inhibition. Overall, our results show that GA is a novel inhibitor of CXCR4 expression and has a strong potential to suppress osteoclastogenesis mediated by MM cells.