Osteoclasts are unique multinucleated cells formed by fusion of preosteoclasts derived from cells of the monocyte/macrophage lineage, which are induced by RANKL. However, characteristics and subpopulations of osteoclast precursor cells are poorly understood. We show here that a combination of TNF-α, TGF-β, and M-CSF efficiently generates mononuclear preosteoclasts but not multinucleated osteoclasts (MNCs) in rat bone marrow cultures depleted of stromal cells. Using a rat osteoclast-specific mAb, Kat1, we found that TNF-α and TGF-β specifically increased Kat1(+)c-fms(+) and Kat1(+)c-fms(-) cells but not Kat1(-)c-fms(+) cells. Kat1(-)c-fms(+) cells appeared in early stages of culture, but Kat1(+)c-fms(+) and Kat1(+)c-fms(-) cells increased later. Preosteoclasts induced by TNF-α, TGF-β, and M-CSF rapidly differentiated into osteoclasts in the presence of RANKL and hydroxyurea, an inhibitor of DNA synthesis, suggesting that preosteoclasts are terminally differentiated cells. We further analyzed the expression levels of genes encoding surface proteins in bone marrow macrophages (BMM), preosteoclasts, and MNCs. Preosteoclasts expressed itgam (CD11b) and chemokine receptors CCR1 and CCR2; however, in preosteoclasts the expression of chemokine receptors CCR1 and CCR2 was not up-regulated compared to their expression in BMM. However, addition of RANKL to preosteoclasts markedly increased the expression of CCR1. In contrast, expression of macrophage antigen emr-1 (F4/80) and chemokine receptor CCR5 was down-regulated in preosteoclasts. The combination of TNF-α, TGF-β, and M-CSF induced Kat1(+)CD11b(+) cells, but these cells were also induced by TNF-α alone. In addition, MIP-1α and MCP-1, which are ligands for CCR1 and CCR2, were chemotactic for preosteoclasts, and promoted multinucleation of preosteoclasts. Finally, we found that Kat1(+)c-fms(+) cells were present in bone tissues of rats with adjuvant arthritis. These data demonstrate that TNF-α in combination with TGF-β efficiently generates preosteoclasts in vitro. We delineated characteristics that are useful for identifying and isolating rat preosteoclasts, and found that CCR1 expression was regulated in the fusion step in osteoclastogenesis.