The behaviour of multinucleated giant cells (GCs), obtained from a giant cell tumour of the tibia and cultured on glass coverslips or on devitalized bone slices, was studied using light and electron microscopy. Monitoring the GCs on bone slices by phase-contrast microscopy revealed that they had removed calcified bone matrix resulting in excavation of lacunae, with subsequent lateral extension and perforation of the bone slices. Electron microscopy demonstrated for the first time that the GCs responsible for exavating lacunae had two specific membrane modifications, ruffled border and clear zone, and showed basically similar cytoplasmic fine structures to those of osteoclasts. Fluorescence images of the GCs on glass and on bone after rhodamine-conjugated phalloidin staining revealed that most of the GCs had an intensely fluorescent peripheral band composed of a number of F-actin dots called podosomes. Some GCs showed unusual arrangements of podosomes suggesting abortive attempts at GC formation. We have demonstrated that the band structure of the GCs cultured on bone is intimately involved in bone resorption. Two stromal cell types could be recognized. The predominant type, which seemed to be the only neoplastic element because of its proliferative capability, showed quite different fine structural and cytoskeletal features from the GCs. The other type, which was much less frequent and seemed not to proliferate, had morphological similarities to the GCs, and seemed to be their precursor. Importantly GCs cultured on bone and the osteoclasts share common structures for adhesion to and resorption of bone, strongly supporting the view that the GCs of the giant cell tumour of bone are potentially active bone resorbers and can be regarded as osteoclasts.