Increased marrow medullary adipogenesis and an associated decrease in bone mineral density, usually observed in elderly individuals, is a common characteristic in senile osteoporosis. In this study we investigated whether cells of the medullary adipocyte lineage have the potential to directly support the formation of osteoclasts, whose activity in bone leads to bone degradation. An in vitro mesenchymal stem cell (MSC)-derived medullary adipocyte lineage culture model was used to study the expression of the important osteoclast mediators RANKL, M-CSF, SDF-1, and OPG. We further assessed whether adipocytes at a specific developmental stage were capable of supporting osteoclast-like cell formation in culture. In vitro MSC-derived medullary adipocytes showed an mRNA and protein expression profile of M-CSF, RANKL, and OPG that was dependent on its developmental/metabolic stage. Furthermore, RANKL expression was observed in MSC-derived adipocytes that were at a distinct lineage stage and these cells were also capable of supporting osteoclast-like cell formation in co-cultures with peripheral blood mononuclear cells. These results suggest a connection between medullary adipocytes and osteoclast formation in vivo and may have major significance in regards to the mechanisms of decreased bone density in senile osteoporosis.