A critical step in bone resorption is the fusion of mononuclear osteoclast precursors to form multinucleated osteoclasts. However, little is known of the molecular mechanisms that are responsible for this important process. Since the expression of proteins in the cadherin family of homophilic calcium-dependent cell adhesion molecules is involved in the fusion process for certain other cells, we examined their role in osteoclast formation. Immunohistochemical examination of human and mouse bone using monoclonal antibodies to human and mouse E-cadherin clearly demonstrated positive staining in osteoclasts. N- and P-cadherin were not detected. In cultures of murine marrow mononuclear cells in which osteoclasts form by cell fusion, E-cadherin expression determined by Western blotting reached the highest levels as fusion was taking place. Expression of E-cadherin gene fragment was also detected in the marrow cultures by polymerase chain reaction. To study the functional role of E-cadherin expression in osteoclastic differentiation, neutralizing monoclonal antibodies were examined for their effects on osteoclast formation. The antibodies decreased the number of tartrate-resistant acid phosphatase (a marker of murine osteoclast)-positive multinucleated cell (TRAP-positive MNC) by inhibiting the fusion of mononuclear osteoclast precursors, but not proliferation of these cells or their attachment to plastic dish surfaces. This inhibitory effect was reversible. Furthermore, synthetic peptides containing the cell adhesion recognition sequence of cadherins also decreased TRAP-positive MNC formation. The antibodies and peptides inhibited not only osteoclast formation but also bone resorption. Antibodies to other types of cadherins and control rat IgG had no effects in these culture systems. Our findings suggest that E-cadherin expression may be involved in fusion (differentiation) of hemopoietic osteoclast precursors into mature multinucleated osteoclasts.