Osteoclasts are multinucleated cells and the principal resorptive cells of bone. Although osteoclasts are myeloid origin, the role of haematopoietic transcription factors in osteoclastogenesis has not been explored. Here we show that messenger RNA for the myeloid- and B-cell-specific transcription factor PU.1 progressively increases as marrow macrophages assume the osteoclast phenotype in vitro. The association between PU.1 and osteoclast differentiation was confirmed by demonstrating that PU.1 expression increased with the induction of osteoclastogenesis by either 1,25-dihydroxyvitamin D3 or dexamethasone. Consistent with the participation of PU.1 on osteoclastogenesis, we found that the development of both osteoclasts and macrophages is arrested in PU.1-deficient mice. Reflecting the absence of osteoclasts, PU.1(-/-) mice exhibit tha classic hallmarks of osteopetrosis, a family of sclerotic bone diseases. These animals were rescued by marrow transplantation, with complete restoration of osteoclast and macrophage differentiation, verifying that the PU.1 lesion is intrinsic to haematopoietic cells. The absence of both osteoclasts and macrophages in PU.1-mutant animals suggests that the transcription factor regulates the initial stages of myeloid differentiation, and that its absence represents the earliest developmetal osteopetrotic mutant yet described.