The decrease in estrogen levels that follows the onset of menopause results in rapid bone loss and osteoporosis. The major effect of estrogen deficiency on bone metabolism is an increase in the rate of bone resorption, but the precise mechanism by which this occurs remains unresolved. A recently developed technique for the isolation of avian osteoclasts has been modified to obtain highly purified multinucleated cells from human giant cell tumors. These osteoclast-like cells have been examined for evidence of estrogen receptors (ERs) and responses to 17 beta-estradiol (17 beta-E2). Analysis of giant-cell RNA demonstrated expression of ER mRNA. Furthermore, immunoblot analysis revealed that the giant cells contained a 66-kDa protein that was recognized by a monoclonal antibody specific for the human ER. When isolated multinucleated cells were cultured on slices of bone, there was a dose-dependent decrease in resorption in response to treatment detectable at 10 pM 17 beta-E2. Treatment with 10 nM 17 alpha-estradiol or vehicle (control) did not inhibit resorption. Moreover, the multinucleated cells isolated from these tumors had decreased mRNA levels for cathepsin B, cathepsin D, and tartrate-resistant acid phosphatase (TRAP) as well as secreted cathepsin B and TRAP enzyme activity in response to treatment with 10 nM 17 beta-E2. In contrast to these data, no change in gene expression was detected in mononuclear cells from these tumors in response to 17 beta-E2 treatment. These data support the proposition that human osteoclasts are target cells for estrogen and that estrogen can inhibit bone resorption by human osteoclasts.