Multiple myeloma (MM) cells specifically attract peripheral-blood monocytes, while interaction of MM with bone marrow stromal cells (BMSCs) significantly increased monocyte recruitment (p<0.01). The CXCL12 chemokine, produced by both the MM and BMSCs, was found to be a critical regulator of monocyte migration. CXCL12 production was up-regulated under MM-BMSCs co-culture conditions, whereas blockage with anti-CXCR4 antibodies significantly abrogated monocyte recruitment toward a MM-derived conditioned medium (p<0.01). Furthermore, elevated levels of CXCL12 were detected in MM, but not in normal BM samples, whereas malignant MM cells often represented the source of increased CXCL12 in the BM. Blood-derived macrophages effectively supported MM cells proliferation and protected them from chemotherapy-induced apoptosis. Importantly, MM cells affected macrophage polarization, elevating the expression of M2-related scavenger receptor CD206 in macrophages and blocking LPS-induced TNFα secretion (a hallmark of M1 response). Of note, MM-educated macrophages suppressed T-cell proliferation and IFNγ production in response to activation. Finally, increased numbers of CXCR4-expressing CD163+CD206+ macrophages were detected in the BM of MM patients (n=25) in comparison to MGUS (n=11) and normal specimens (n=8). Taken together, these results identify macrophages as important players in MM tumorogenicity, and recognize the CXCR4/CXCL12 axis as a critical regulator of MM-stroma interactions and microenvironment formation.