The nfkb1 and nfkb2 genes encode closely related products regulating immune and inflammatory responses. Their role during development and differentiation remains unclear. The generation of nfkb1 null mice (p50-/-) resulted in altered immune responses, but had no effect on development. Similarly, nfkb2 knockout mice (p52-/-) did not show developmental defects (J.C. et al., manuscript submitted). We have investigated the potential for in vivo compensatory functions of these genes by generating double-knockout mice. The surprising result was that the animals developed osteopetrosis because of a defect in osteoclast differentiation, suggesting redundant functions of NF-kappaB1 and NF-kappaB2 proteins in the development of this cell lineage. The osteopetrotic phenotype was rescued by bone marrow transplantation, indicating that the hematopoietic component was impaired. These results define a new mouse osteopetrotic mutant and implicate NF-kappaB proteins in bone development, raising new directions in the treatment of bone disorders.