Consumptive hypothyroidism, a rare pediatric disorder, arises from aberrant Dio3 expression, which inactivates thyroid hormones and disrupts skeletal development. This study investigates the regulatory role of the long non-coding RNA Dio3os, which activates Dio3 in cis and suppresses osteoblast differentiation in trans. We focused on mouse Dio3os variant 203 and human variants 203 and 205. Chromatin accessibility and histone modification analyses revealed higher chromatin openness and active histone H3 modifications at the Dio3os promoter and exons 2 and 3, followed by increased RUNX2 binding with reduced histone H3 modifications during maturation. Dio3os expression is enhanced by HDAC1/2, HIF1a, and thyroid hormones, but repressed by BMP2, TGFb, Runx2, and Brg1. Overexpression of Dio3os upregulated Dio3 while downregulating osteogenic markers. CRISPR-mediated deletion of Dio3os exons or premature intronic polyadenylation suppressed Dio3 and restored osteogenic gene expression. RNA-seq and ATAC-seq confirmed enhanced thyroid hormone-responsive osteoblast gene activity in Dio3os-CRISPR-knockout cells. These findings reveal Dio3os as a key regulator of thyroid hormone metabolism and bone formation, presenting a novel target for treating skeletal abnormalities in early childhood hypothyroidism.