Transforming growth factor-β1 (TGF-β1) has biological functions in various types of cells. However, its roles in the regulation of osteoclast formation and function are unclear. To examine them, we employed a culture system in which unfractionated cells obtained from long bones of 13-day-old mice were cultured on a dentine slice. We found that TGF-β1 has a potent inhibitory effect on osteoclastic bone resorption at a dose of 0.2-5 ng/ml. By electron microscopy the osteoclasts appeared to have fewer mitochondria and ruffled borders than those in control cultures. But in the presence of 1,25-dihydroxyvitamin D3, [1,25-(OH)2D3], TGF-β1 at a dose of 0.2-1 ng/ml stimulated the formation of osteoclasts from unfractionated bone cell cultures in which preexistent osteoclasts had degenerated. Thus, using stromal cell-free he-mopoietic blast cells, we examined the direct action of TGF-β1 on osteoclast precursors. Although TGF-β1 inhibited tartrate-resistant acid phosphatase-positive (TRAP) multinucleate cell (MNC) formation induced by 1,25-(OH)2D3, the conditioned medium (CM) of TGF-β1-treated MC3T3-E1 cells stimulated such formation. These results suggest that TGF-β1 inhibits osteoclastic bone resorption but stimulates osteoclast formation via the action of factor(s) produced by TGF-β1-treated osteoblasts in the presence of 1,25-(OH)2D3. © 1995 Springer-Verlag.