There is currently no therapy available for periprosthetic osteolysis, the most common cause of arthroplasty failure. Here, the role of AnxA1 in periprosthetic osteolysis and potential therapeutics were investigated. Reducing the expression of AnxA1 in calvarial tissue was found to be associated with increased osteolytic lesions and the osteolytic lesions induced by debris implantation were more severe in AnxA1-defecient mice than in wild-type mice. AnxA1 inhibits the differentiation of osteoclasts through suppressing NFκB signaling and promoting the PPAR-γ pathway. Administration of N-terminal-AnxA1 (Ac2-26 peptide) onto calvariae significantly reduced osteolytic lesions triggered by wear debris. These therapeutic effects were abrogated in mice that had received the PPAR-γ antagonist, suggesting that the AnxA1/PPAR-γ axis has an inhibitory role in osteolysis. The administration of Ac2-26 suppressed osteolysis induced by TNF-α and RANKL injections in mice. These findings indicate that AnxA1 is a potential therapeutic agent for the treatment of periprosthetic osteolysis.