When monocytes were cocultured with human osteosarcoma-derived cells (HOS cells), multinucleated giant cell formation of monocytes was induced. Intriguingly, even when a filter was interposed between monocytes and HOS cells, polykaryocytes also appeared. The multinucleated giant cells have characters similar to osteoclast-like cells. These findings indicate that soluble factor(s) secreted from HOS cells play an important role in polykaryocyte formation from monocytes. Twelve cloned cells were established from HSOS-1 cells and their capacities of inducing osteoclasts were investigated. Three cloned cells inducing nos. 4 and 9 had an ability of inducing osteoclasts (multinucleated giant cells, TRAP, calcitonin receptor and c-src mRNAs, osteoresorbing activity), and three cells, including nos. 1 and 5, did not show the ability. HOS cells and the cloned cells expressed several cytokine mRNAs. M-CSF was detected in the culture fluids of HOS cells, which also expressed RANK and RANK/ODF/OPGL mRNAs. Intriguingly, HOS cells secreting a soluble osteoclast inducing factors(s) expressed TNF-alpha converting enzyme mRNA. Furthermore, OCIF/OPG inhibited HOS cell-induced osteoclastogenesis and soluble RANKL could be detected in the culture fluids of HOS cells expressing TACE, suggesting that one of soluble osteoclast-inducing factor(s) is soluble RANKL. When blood monocytes were indirectly cocultured with HSOS-1 cells or cloned no. 9 cells in the presence of OCIF for 14 days, HOS cell-mediated osteoclastogenesis was suppressed, indicating that RANK-RANKL system is involved in the HOS cell-mediated osteoclastogenesis.