Osteoclasts are bone-resorbing cells derived from haematopoietic precursors of the monocyte-macrophage lineage. Mice lacking Fos (encoding c-Fos) develop osteopetrosis due to an early differentiation block in the osteoclast lineage. c-Fos is a component of the dimeric transcription factor activator protein-1 (Ap-1), which is composed mainly of Fos (c-Fos, FosB, Fra-1 and Fra-2) and Jun proteins (c-Jun, JunB and JunD). Unlike Fra-1 (encoded by Fosl1), c-Fos contains transactivation domains required for oncogenesis and cellular transformation. The mechanism by which c-Fos exerts its specific function in osteoclast differentiation is not understood. Here we show by retroviral-gene transfer that all four Fos proteins, but not the Jun proteins, rescue the differentiation block in vitro. Structure-function analysis demonstrated that the major carboxy-terminal transactivation domains of c-Fos and FosB are dispensable and that Fra-1 (which lacks transactivation domains) has the highest rescue activity. Moreover, a transgene expressing Fra-1 rescues the osteopetrosis of c-Fos-mutant mice in vivo. The osteoclast differentiation factor Rankl (also known as TRANCE, ODF and OPGL; refs 8-11) induces transcription of Fosl1 in a c-Fos-dependent manner, thereby establishing a link between Rank signalling and the expression of Ap-1 proteins in osteoclast differentiation.