Bone development requires the recruitment of osteoclast precursors from surrounding mesenchyme, thereby allowing the key events of bone growth such as marrow cavity formation, capillary invasion, and matrix remodeling. We demonstrate that mice deficient in gelatinase B/matrix metalloproteinase (MMP)-9 exhibit a delay in osteoclast recruitment. Histological analysis and specialized invasion and bone resorption models show that MMP-9 is specifically required for the invasion of osteoclasts and endothelial cells into the discontinuously mineralized hypertrophic cartilage that fills the core of the diaphysis. However, MMPs other than MMP-9 are required for the passage of the cells through unmineralized type I collagen of the nascent bone collar, and play a role in resorption of mineralized matrix. MMP-9 stimulates the solubilization of unmineralized cartilage by MMP-13, a collagenase highly expressed in hypertrophic cartilage before osteoclast invasion. Hypertrophic cartilage also expresses vascular endothelial growth factor (VEGF), which binds to extracellular matrix and is made bioavailable by MMP-9 (Bergers, G., R. Brekken, G. McMahon, T.H. Vu, T. Itoh, K. Tamaki, K. Tanzawa, P. Thorpe, S. Itohara, Z. Werb, and D. Hanahan. 2000. Nat. Cell Biol. 2:737-744). We show that VEGF is a chemoattractant for osteoclasts. Moreover, invasion of osteoclasts into the hypertrophic cartilage requires VEGF because it is inhibited by blocking VEGF function. These observations identify specific actions of MMP-9 and VEGF that are critical for early bone development.