Biglycan (Bgn) and Fibromodulin (Fmod) are subtypes of the small leucine-rich family of proteoglycans (SLRP). In this study we examined the skeletal phenotype of BgnFmod double knockout (BgnFmod KO) mice and found they were smaller in size and have markedly reduced bone mass compared to WT. The low bone mass (LBM) phenotype is the result of both the osteoblasts and osteoclasts from BgnFmod KO mice having higher differentiation potential and being more active compared to WT mice. Using multiple approaches, we showed that both Bgn and Fmod directly bind TNFα as well as RANKL in a dose dependent manner and that despite expressing higher levels of both TNFα and RANKL, BgnFmod KO derived osteoblasts cannot retain these cytokines in the vicinity of the cells, which leads to elevated TNFα and RANKL signaling and enhanced osteoclastogenesis. Furthermore, adding either Bgn or Fmod to osteoclast precursor cultures significantly attenuated the cells ability to form TRAP positive, multinucleated giant cells. In summary, our data indicates that Bgn and Fmod expressed by the bone forming cells, are novel coupling ECM components that control bone mass through sequestration of TNFα and/or RANKL, thereby adjusting their bioavailability in order to regulate osteoclastogenesis.