Multiple myeloma (MM) is a plasma cell malignancy characterized by a high capacity to induce osteolytic bone lesions. Bone destruction in MM results from increased osteoclast formation and activity that occur in close proximity to myeloma cells. However, histomorphometric studies have demonstrated that MM patients with osteolytic bone lesions have lower numbers of osteoblasts and decreased bone formation. This impaired bone formation plays a critical role in the bone-destructive process. Recently, the biologic mechanisms involved in the osteoblast inhibition induced by MM cells have begun to be elucidated. In this article, the pathophysiology underlying osteoblast inhibition in MM is reviewed.