Macrophages, osteoclasts and dendritic cells are derived from hematopoietic stem cells through monocyte/macrophage lineage common precursor cells. Macrophages are induced in the presence of M-CSF alone whereas osteoclasts are induced by M-CSF and RANKL. The cooperation of transcription factors, c-Fos and NFATc1 is essential for osteoclast differentiation. GM-CSF is an inducer of dendritic cells, and in contrast to osteoclast differentiation, M-CSF and c-Fos are inhibitors of dendritic cell differentiation. On the other hand, mesenchymal stem cells (MSCs) give rise to osteoblasts. In embryonic stage, MSCs in perichondrium are marked by ALCAM. Recently, osteoblasts are reported to provide'Niche'for hematopoietic stem cells in bone marrow. Here we review the differentiation and functions of monocyte/macrophage lineage cells and osteoblasts.