In unstimulated conditions osteoclast renewal occurs as a result of the stromal cell production of the key osteoclastogenic factors, receptor activator of NFkB ligand (RANKL) and macrophage colony-stimulating factor (M-CSF). Inflammation is known to cause increased osteoclastogenesis; however, the mechanisms responsible for this phenomenon are poorly understood. We now show that interleukin-1 (IL-1) and tumor necrosis factor alpha (TNFα), cytokines typically produced in inflammatory conditions, increase the stromal cell production of IL-7. This factor, in turn, up-regulates production of osteoclastogenic cytokines by T cells leading to stimulation of osteoclast (OC) formation. Although T cells were found to produce soluble forms of both RANKL and M-CSF, saturating concentrations of osteoprotegerin failed to inhibit approximately 40% of the OC formation, suggesting that IL-7 acts via both RANKL-dependent and RANKL-independent pathways. Despite the identification of T-cell–secreted M-CSF, this cytokine was not essential for either RANKL-dependent or -independent OC formation, suggesting that T cells secrete other cytokines capable of substituting for M-CSF action. On the basis of our data, we propose a novel mechanism for inflammatory bone loss in which induction of IL-7 from stromal cells by IL-1 and TNFα leads to the production of soluble osteoclastogenic cytokines by T cells. Thus, the mechanism by which IL-7 causes bone resorption involves the activation of T cells and the T-cell–dependent augmentation of osteoclastogenesis.