Bone metastasis is a frequent complication of breast cancer that is often accelerated by TGF-β signaling; however, little is known about how the TGF-β pathway is regulated during bone metastasis. Here we report that deleted in liver cancer 1 (DLC1) is an important regulator of TGF-β responses and osteolytic metastasis of breast cancer cells. In murine models, breast cancer cells lacking DLC1 expression exhibited enhanced capabilities of bone metastasis. Knockdown of DLC1 in cancer cells promoted bone metastasis, leading to manifested osteolysis and accelerated death in mice, while DLC1 overexpression suppressed bone metastasis. Activation of Rho-ROCK signaling in the absence of DLC1 mediated SMAD3 linker region phosphorylation and TGF-β-induced expression of parathyroid hormone-like hormone (PTHLH), leading to osteoclast maturation for osteolytic colonization. Furthermore, pharmacological inhibition of Rho-ROCK effectively reduced PTHLH production and breast cancer bone metastasis in vitro and in vivo. Evaluation of clinical breast tumor samples revealed that reduced DLC1 expression was linked to elevated PTHLH expression and organ-specific metastasis to bone. Overall, our findings define a stroma-dependent paradigm of Rho signaling in cancer and implicate Rho-TGF-β crosstalk in osteolytic bone metastasis.