The claudin (Cldn) family comprises 27 members of 20-34 kDa transmembrane tight junction proteins. In addition to their established canonical role as barriers controlling paracellular flow of molecules, a distinct non-canonical role for Cldns as mediators of cell signaling is now emerging. In our studies evaluating Cldn family expression levels during osteoblast differentiation, Cldn-11 showed the largest increase (60-fold). Immunohistochemistry studies revealed high Cldn-11 expression in trabecular (Tb) bone lining cells. MicroCT analysis of femurs, tibiae, and vertebrae of Cldn-11 knockout (KO) mice at 12 weeks of age exhibited a 40% (P < 0.01) reduction in Tb bone volume adjusted for tissue volume compared to control mice, a change caused by significant reductions in Tb number and thickness and increase in Tb separation. Histomorphometry and serum biomarker studies revealed that reduced bone formation, not increased resorption, is the cause for reduced Tb bone volume in the Cldn-11 KO mice. Cldn-11 KO osteoblasts expressed reduced ALP and BSP while Cldn-11 overexpression in MC3T3-E1 cells increased expression of ALP and BSP. Mechanistically, Cldn-11 interacted with tetraspanin (Tspan)3 in osteoblasts, and Tspan3 knockdown reduced osteoblast differentiation. Since members of the Tspan family regulate cell functions via Notch signaling, we evaluated whether Cldn-11/Tspan3 regulates Notch signaling in osteoblasts. Accordingly, Notch targets Hey1 and Hey2 were significantly upregulated in Cldn-11 overexpressing cultures but downregulated in both Cldn-11 KO and Tspan3 knockdown osteoblasts. Since ADAM10 has been shown to interact with Tspan family members to regulate Notch signaling, we evaluated whether Cldn-11 regulates ADAM10 expression. Cldn-11 overexpressing cells express more mature ADAM10, and an ADAM10 inhibitor blocked the Cldn-11 effect on osteoblast differentiation. Based on these data, we propose Cldn-11 as a novel component of a osteoblast cell surface protein complex, comprising Tspan3 and ADAM10, which regulates Notch signaling and cell differentiation.