Transforming growth factor‐β (TGF‐β) has been shown to both inhibit and to stimulate bone resorption and osteoclastogenesis. This may be due, in part, to differential effects on bone marrow stromal cells that support osteoclastogenesis vs. direct effects on osteoclastic precursor cells. In the present study, we used the murine monocytic cell line, RAW 264.7, to define direct effects of TGF‐β on pre‐osteoclastic cells. In the presence of macrophage‐colony stimulating factor (M‐CSF) (20 ng/ml) and receptor activator of NF‐κB ligand (RANK‐L) (50 ng/ml), TGF‐β1 (0.01–5 ng/ml) dose‐dependently stimulated (by up to 120‐fold) osteoclast formation (assessed by the presence of tartrate‐resistant acid phosphatase (TRAP) positive multinucleated cells and expression of calcitonin and vitronectin receptors). In addition, TGF‐β1 also increased steady state RANK mRNA levels in a time‐ (by up to 3.5‐fold at 48 h) and dose‐dependent manner (by up to 2.2‐fold at 10 ng/ml). TGF‐β1 induction of RANK mRNA levels was present both in undifferentiated RAW cells as well as in cells that had been induced to differentiate into osteoclasts by a 7‐day treatment with M‐CSF and RANK‐L. Using a fluorescence‐labeled RANK‐L probe, we also demonstrated by flow cytometry that TGF‐β1 resulted in a significant increase in the percentage of RANK+ RAW cells (P < 0.05), as well as an increase in the fluorescence intensity per cell (P < 0.05), the latter consistent with an increase in RANK protein expression per cell. These data thus indicate that TGF‐β directly stimulates osteoclastic differentiation, and this is accompanied by increased RANK mRNA and protein expression. J. Cell. Biochem. 83: 320–325, 2001. © 2001 Wiley‐Liss, Inc.