Clinical evidence indicates a close association between muscle dysfunction and bone loss; however, the underlying mechanisms remain unclear. Here, we report that muscle dysfunction-related bone loss in humans with limb-girdle muscular dystrophy is associated with decreased expression of folliculin-interacting protein 1 (FNIP1) in muscle tissue. Supporting this finding, murine gain- and loss-of-function genetic models demonstrated that muscle-specific ablation of FNIP1 caused decreased bone mass, increased osteoclastic activity, and mechanical impairment that could be rescued by myofiber-specific expression of FNIP1. Myofiber-specific FNIP1 deficiency stimulated expression of nuclear translocation of transcription factor EB, thereby activating transcription of insulin-like growth factor 2 (Igf2) at a conserved promoter-binding site and subsequent IGF2 secretion. Muscle-derived IGF2 stimulated osteoclastogenesis through IGF2 receptor signaling. AAV9-mediated overexpression of IGF2 was sufficient to decrease bone volume and impair bone mechanical properties in mice. Further, we found that serum IGF2 concentration was negatively correlated with bone health in humans in the context of osteoporosis. Our findings elucidate a muscle-bone cross-talk mechanism bridging the gap between muscle dysfunction and bone loss. This cross-talk represents a potential target to treat musculoskeletal diseases and osteoporosis.