In just 3 years, striking new advances have been made in understanding the molecular mechanisms that govern the crosstalk between osteoblasts/stromal cells and hematopoietic osteoclast precursor cells that leads to osteoclastogenesis. Led first by the discovery of osteoprotegerin (OPG), a naturally occurring protein with potent osteoclastogenesis inhibitory activity, rapid progress was made to the isolation of RANKL, a transmembrane ligand expressed on osteoblasts/stromal cells that binds to RANK, a transmembrane receptor on hematopoietic osteoclast precursor cells. The interaction of RANK and RANKL initiates a signaling and gene expression cascade that results in differentiation and maturation of osteoclast precursor cells to active osteoclasts capable of resorbing bone. OPG acts as a decoy receptor, binding to RANKL and blocking its interaction with RANK, inhibiting osteoclast development. Many of the calciotropic hormones and cytokines, including 1,25(OH)2D3, PTH, PGE2 and IL-11, appear to act through a dual capacity to inhibit production of OPG and stimulate production of RANKL. Estrogen, on the other hand, appears to inhibit production of RANKL and RANKL-stimulated osteoclastogenesis. Recently, the results of the first clinical trial with OPG supported its potential as a therapeutic agent for diseases such as osteoporosis. The new understanding provided by the RANK/RANKL/OPG paradigm for both differentiation of osteoclasts and their activation has had tremendous impact on the field and opened new avenues for development of possible treatments of diseases characterized by excessive bone resorption.