Antigen- or mitogen-stimulated leukocytes release bone-resorbing activity into culture supernatants in vitro. Among the agents likely to be present in such supernatants are monocyte-derived tumor necrosis factor (TNF-alpha) and lymphocyte-derived tumor necrosis factor (TNF-beta) (lymphotoxin), both of which have recently been shown to stimulate bone resorption in organ culture. To identify the mechanism of action of these agents, we compared bone resorption by isolated osteoclasts with bone resorption by osteoclasts cocultured with osteoblastic cells, and with bone resorption by osteoclasts incubated with supernatants from osteoblastic cells, in the presence and absence of recombinant TNF-alpha and TNF-beta. We found that neither TNF-alpha nor TNF-beta had any significant effect on bone resorption by isolated osteoclasts, but in the presence of osteoblasts the agents caused a twofold to threefold stimulation of bone resorption. A similar degree of stimulation was achieved by supernatants from osteoblasts incubated with TNF before addition to osteoclasts, compared with supernatants to which TNF were added after osteoblast incubation. These experiments suggest that TNF-alpha and TNF-beta stimulate bone resorption through a primary effect on osteoblastic cells, which are induced by TNF to produce a factor that stimulates osteoclastic resorption. Half-maximal stimulation of resorption occurred at 1.5 X 10(-10) M and 2.5 X 10(-10) M for TNF-alpha and TNF-beta, respectively. This degree of potency is comparable to that of parathyroid hormone, the major physiologic systemic regulator of bone resorption, and suggests that the TNF may exert a significant influence on osteoclastic bone resorption in vivo.