1,25-Dihydroxyvitamin D3 induces cells derived from mononuclear phagocytes such as HL-60 and U937 to differentiate to macrophage-like cells and causes alveolar macrophages to form multinucleated cells in vitro. Since the osteoclast is thought to be derived from early marrow cells of the macrophage lineage, we cultured normal primate marrow mononuclear cells in medium containing 1,25-dihydroxy-vitamin D3. We found that large multinucleated cells (3-30 nuclei per cell) formed after 2-3 weeks of culture. Addition of 1,25-dihydroxyvitamin D3 to these cultures markedly stimulated multinucleated cell formation. Other vitamin D analogues, parathyroid hormone, prostaglandin E2, and calcitonin failed to stimulate multinucleated cell formation. However, calcitonin inhibited the stimulation of multinucleated cell formation by 1,25-dihydroxyvitamin D3. The multinucleated cells that formed in these cultures contained a tartrate-resistant acid phosphatase activity, a marker enzyme for osteoclasts. This activity was increased by 1,25-dihydroxyvitamin D3 and parathyroid hormone, and calcitonin inhibited the increase in acid phosphatase activity stimulated by these compounds. Ultrastructurally, the multinucleated cells had several features similar to those of osteoclasts. These data suggest that the multinucleated cells in our culture have several characteristics of osteoclasts and that the potent bone-resorbing activity of 1,25-dihydroxyvitamin D3 in vivo and in vitro may be mediated in part by stimulation of marrow mononuclear cells to form osteoclasts.