Key osteoclast (OCL) regulatory gene promoters in bone marrow–derived monocytes harbor bivalent histone modifications that combine activating Histone 3 lysine 4 tri‐methyl (H3K4me3) and repressive H3K27me3 marks, which upon RANKL stimulation resolve into repressive or activating architecture. Enhancer of zeste homologue 2 (EZH2) is the histone methyltransferase component of the polycomb repressive complex 2, which catalyzes H3K27me3 modifications. Immunofluorescence microscopy reveals that EZH2 localization during murine osteoclastogenesis is dynamically regulated. Using EZH2 knockdown and small molecule EZH2 inhibitor GSK126, we show that EZH2 plays a critical epigenetic role in OCL precursors (OCLp) during the first 24 hours of RANKL activation. RANKL triggers EZH2 translocation into the nucleus where it represses OCL‐negative regulators MafB , Irf8, and Arg1. Consistent with its cytoplasmic localization in OCLp, EZH2 methyltransferase activity is required during early RANKL signaling for phosphorylation of AKT, resulting in downstream activation of the mTOR complex, which is essential for induction of OCL differentiation. Inhibition of RANKL‐induced pmTOR‐pS6RP signaling by GSK126 altered the translation ratio of the C/EBPβ‐LAP and C/EBPβ‐LIP isoforms and reduced nuclear translocation of the inhibitory C/EBPβ‐LIP, which is necessary for transcriptional repression of the OCL negative‐regulatory transcription factor MafB . EZH2 in multinucleated OCL is primarily cytoplasmic and mature OCL cultured on bone segments in the presence of GSK126 exhibit defective cytoskeletal architecture and reduced resorptive activity. Here we present new evidence that EZH2 plays epigenetic and cytoplasmic roles during OCL differentiation by suppressing MafB transcription and regulating early phases of PI3K‐AKT–mTOR‐mediated RANKL signaling, respectively. Consistent with its cytoplasmic localization, EZH2 is required for cytoskeletal dynamics during resorption by mature OCL. Thus, EZH2 exhibits complex roles in supporting osteoclast differentiation and function.