Osteoclasts are large multinucleated bone-resorbing cells formed by the fusion of monocyte/macrophage-derived precursors that are thought to undergo apoptosis once resorption is complete. Here, by intravital imaging, we reveal that RANKL-stimulated osteoclasts have an alternative cell fate in which they fission into daughter cells called osteomorphs. Inhibiting RANKL blocked this cellular recycling and resulted in osteomorph accumulation. Single-cell RNA sequencing showed that osteomorphs are transcriptionally distinct from osteoclasts and macrophages and express a number of non-canonical osteoclast genes that are associated with structural and functional bone phenotypes when deleted in mice. Furthermore, genetic variation in human orthologs of osteomorph genes causes monogenic skeletal disorders and associates with bone mineral density, a polygenetic skeletal trait. Thus, osteoclasts recycle via osteomorphs, a cell type involved in the regulation of bone resorption that may be targeted for the treatment of skeletal diseases.