Receptor activator of nuclear factor κB ligand (RANKL) is critically involved in bone erosion of rheumatoid arthritis (RA). We previously reported association between younger age at onset of RA and a RANKL promoter SNP that conferred an elevated promoter activity via binding to a transcription factor SOX5. Here we study the regulation of SOX5 levels in relation to RANKL expression in RA synovial fibroblasts (SF) and the development of bone erosion in the collagen-induced arthritis (CIA) mouse. Our data indicated SOX5 levels were higher in synovium and synovial fluid from RA compared to osteoarthritis patients. Pro-inflammatory cytokines upregulated SOX5 and RANKL expression in both primary RA SF and the rheumatoid synovial fibroblast cell line, MH7A. Overexpression of SOX5 resulted in significantly increased RANKL levels, while knockdown of SOX5 resulted in diminished IL-6 mediated RANKL upregulation in MH7A cells. Chromatin immunoprecipitation (ChIP) showed approximately 3-fold enrichment of RANKL-specific DNA in anti-SOX5 immunoprecipitate in IL-6 treated MH7A cells as compared to untreated cells. Locally silencing SOX5 gene significantly diminished RANKL positive cells and bone erosion in CIA mice. These findings suggest SOX5 is an important regulator of IL-6-induced RANKL expression in RA SF.