Osteoclasts develop from haemopoietic cells of the monocyte–macrophage lineage. Osteoblasts or stromal cells are essentially involved in osteoclastogenesis through cell–cell interaction with osteoclast progenitor cells. Recent findings indicate that osteoblasts/stromal cells express osteoclast differentiation factor (ODF, also called RANKL, TRANCE and OPGL) as a membrane‐associated factor in response to several osteotropic factors to support osteoclast differentiation. ODF is a new member of the tumour necrosis factor (TNF) ligand family. Osteoclast precursors, which express RANK, a TNF receptor family member, recognize ODF through cell–cell interactions with osteoblasts/stromal cells, and differentiate into osteoclasts in the presence of macrophage colony‐stimulating factor (M‐CSF). Osteoclastogenesis inhibitory factor (OCIF, also called OPG) is a secreted TNF receptor, which acts as a decoy receptor for ODF. ODF is responsible for inducing not only differentiation, but also activation of osteoclasts. Interleukin 1α (IL‐1α) can be substituted for ODF in inducing the activation of osteoclasts. Recently, it was shown that mouse TNFα stimulated the differentiation of M‐CSF‐dependent mouse bone marrow macrophages into osteoclasts in the presence of M‐CSF without any help of osteoblasts/stromal cells. Osteoclast formation induced by TNFα was inhibited by antibodies against TNF type 1 receptor (TNFR1) or TNFR2, but not by OCIF. Osteoclasts induced by TNFα formed resorption pits on dentine slices only in the presence of IL‐1α. These results demonstrate that TNFα stimulates osteoclast differentiation through a mechanism independent of the ODF–RANK interaction. TNFα and IL‐1α may play an important role in pathological bone resorption due to inflammation.