Formation of osteolytic lesions is a key pathophysiological feature in multiple myeloma and results from the interaction of myeloma cells with the bone marrow microenvironment. Matrix metalloproteinases (MMPs) and plasmin may be involved in bone destruction, but their precise roles have not been clarified. Furthermore, the impact of osteoblast-related alterations on myeloma bone disease is not well understood. We addressed this complex phenomenon by applying a coculture system between myeloma cells and osteoblasts. Osteoblasts induced expression of MMP-1 and upregulated the expression of MMP-2, urokinase plasminogen activator (uPA) and hepatocyte growth factor (HGF) in myeloma cells. In turn, interaction with myeloma cells led to abundant MMP-1 expression in osteoblasts. Because MMP-1 degrades collagen, its upregulation might represent an essential mechanism contributing to bone destruction. Cocultures using primary myeloma cells confirmed the results obtained with cell lines. The mechanisms responsible for MMP-1 upregulation are mediated by both membrane-bound and soluble factors, and involve the p38 mitogen-activated protein kinase (MAPK) pathway. The interaction with osteoblasts enhances the capability of myeloma cells to transmigrate and invade through Matrigel or type I collagen. Using appropriate inhibitors, we provide evidence that these processes involve MMPs, uPA, HGF and activation of p38 MAPK.