We report that transgenic mice expressing measles virus nucleocapsid protein (MVNP) in osteoclasts (OCLs) (MVNP mice) are Paget's disease (PD) models and that OCLs from patients with PD and MVNP mice express high levels of OCL-derived IGF1 (OCL-IGF1). To determine OCL-IGF1's role in PD and normal bone remodeling, we generated WT and MVNP mice with targeted deletion of Igf1 in OCLs (Igf1-cKO) and MVNP/Igf1-cKO mice, and we assessed OCL-IGF1's effects on bone mass, bone formation rate, EphB2/EphB4 expression on OCLs and osteoblasts (OBs), and pagetic bone lesions (PDLs). A total of 40% of MVNP mice, but no MVNP/Igf1-cKO mice, had PDLs. Bone volume/tissue volume (BV/TV) was decreased by 60% in lumbar vertebrae and femurs of MVNP/Igf1-cKO versus MVNP mice with PDLs and by 45% versus all MVNP mice tested. Bone formation rates were decreased 50% in Igf1-cKO and MVNP/Igf1-cKO mice versus WT and MVNP mice. MVNP mice had increased EphB2 and EphB4 levels in OCLs/OBs versus WT and MVNP/Igf1-cKO, with none detectable in OCLs/OBs of Igf1-cKO mice. Mechanistically, IL-6 induced the increased OCL-IGF1 in MVNP mice. These results suggest that high OCL-IGF1 levels increase bone formation and PDLs in PD by enhancing EphB2/EphB4 expression in vivo and suggest OCL-IGF1 may contribute to normal bone remodeling.