Osteoprotegerin and osteoprotegerin ligand have recently been identified as novel proteins that inhibit and stimulate, respectively, osteoclast formation. We examined the possibility that osteoprotegerin would inhibit cancer-induced osteoclastogenesis and cancer growth in bone. An experimental model was used in which osteolytic tumors are known to stimulate osteoclastogenesis and grow in femora of osteoclast-deficient mice (op/op). Osteoprotegerin treatment decreased the number of osteoclasts by 90% (p < 0.0007) at sites of tumor in a dose-dependent manner and decreased bone tumor area by greater than 90% (p < 0.003). The mechanisms through which osteoprotegerin decreased osteoclast formation in tumor-bearing animals included (a) an osteoprotegerin-mediated, systemic reduction in the number of splenic and bone marrow-residing osteoclast precursor cells, (b) a decrease in the number of osteoclast precursor cells at sites of tumor as detected by cathepsin K and receptor activator of NFκB mRNA expression, and (c) a decrease in osteoprotegerin ligand mRNA at sites of tumor. These findings suggest that osteoprotegerin treatment, in addition to having direct antagonistic effects on endogenous osteoprotegerin ligand, decreases the number of osteoclast precursors and reduces production of osteoprotegerin ligand at sites of osteolytic tumor.