Osteoclasts develop from hematopoietic cells of the monocyte-macrophage lineage. The coculture system of osteoblasts and hematopoietic cells was devised to examine osteoclastogenesis in vitro. Experiments using the coculture system have established the concept that osteoblasts are crucially involved in osteoclastogenesis. Remarkable progress has been achieved during the last decade in our understanding the molecular mechanism of osteoclast differentiation, largely because of the discovery of receptor activator of NF-kappaB ligand (RANKL), an essential cytokine for osteoclastogenesis. Osteoblasts express RANKL in response to bone-resorbing factors. Osteoblasts also produce osteoprotegerin (OPG), a decoy receptor for RANKL, which inhibits osteoclast differentiation and function by interrupting the interaction between RANKL and RANK, a receptor of RANKL. The identification of nuclear factor of activated T-cells cytoplasmic 1 (NFATc1) as a master transcription! factor for RANKL-induced osteoclastogenesis has provided major insight into the molecular mechanism of osteoclast differentiation. The discovery of the immunoreceptor tyrosine-based activation motif (ITAM)-mediated signals as a costimulatory signal in osteoclastogenesis has confirmed that osteoblasts play another important role in osteoclastogenesis. Mutations of RANK, OPG, and RANKL found in humans cause bone diseases associated with expected skeletal abnormalities. Thus, the RANKL/RANK/OPG axis is now recognized as the central regulator of osteoclast differentiation and function.