We provide the first evidence that the bone marrow-derived cytokine, macrophage colony-stimulating factor (M-CSF), inhibits the formation of bone-forming osteoblasts, We examined both osteoclast and osteoblast formation in primary rat bone marrow cultures. As expected, M-CSF together with osteoprotegerin ligand (OPGL) markedly accelerated osteoclastogenesis, In contrast, treatment with M-CSF alone yielded no osteoclasts at any time. The most striking and novel observation was that M-CSF with or without OPGL dramatically suppressed osteoblast formation. In separate experiments, estradiol markedly suppressed osteoclast formation in the M-CSF/OPGL-treated cultures independently of osteoblasts, Consistent with this was the expression of estrogen receptor-alpha (ER alpha) and ERP mRNA in osteoclast precursors. We therefore conclude that in addition to the well-known action of M-CSF to modulate osteoclastogenesis, this cytokine may also regulate osteoblast formation.