During granulomatous inflammatory reactions, myeloid cells can differentiate into activated phagocytic macrophages, wound-healing macrophages, foreign body giant cells, and bone-resorbing osteoclasts. Although it is appreciated that a variety of stimuli, including cytokines, cell-matrix interactions, and challenge with foreign materials can influence myeloid cell fate, little is known of how these signals integrate during this process. In this study, we have investigated the cross talk between receptor activator of NF-kappaB ligand (RANKL)-induced osteoclastogenesis and particle phagocytosis-induced activation of human monocytes. Understanding interconnected signals is of particular importance to disorders, such as periprosthetic osteolysis, in which granulomatous inflammation is initiated by particle phagocytosis in proximity to bone and leads to inflammatory bone loss. Using cell-based osteoclastogenesis and phagocytosis assays together with expression analysis of key regulators of osteoclastogenesis, we show in this study that phagocytosis of disease-relevant particles inhibits RANKL-mediated osteoclastogenesis of human monocytes. Mechanistically, phagocytosis mediates this effect by downregulation of RANK and c-Fms, the receptors for the essential osteoclastogenic cytokines RANKL and M-CSF. RANKL pretreatment of monocytes generates preosteoclasts that are resistant to RANK downregulation and committed to osteoclast formation, even though they retain phagocytic activity. Thus, the relative timing of exposure to phagocytosable particulates and to osteoclastogenic cytokines is critically important in the determination of myeloid cell fate.