A growing body of evidence indicates that megakaryocytes (MK) or their growth factors play a role in skeletal homeostasis. We previously identified a novel regulatory pathway that controls bone formation, which is mediated by MK. In vivo megakaryocytosis resulted in massive bone formation. The co-culture of MK with osteoblasts (OB) resulted in increased OB proliferation in vitro, by a mechanism that required direct cell-to-cell contact. Here, we examined a second MK-mediated pathway that regulates osteoclast (OC) development. We have begun examining the unique inhibitory effect of MK on OC development. Spleen or bone marrow (BM) cells from C57BL/6 mice, as a source of OC precursors, were cultured with M-CSF and RANKL to induce OC development. MK were prepared by culturing fetal liver cells with thrombopoietin and separating cells into MK and non-MK populations. MK were titrated into spleen cell cultures and OC were identified as tartrate-resistant acid phosphatase-positive giant cells with >3 nuclei. There was a significant, P < 0.001, up to 10-fold reduction in OC formed when MK were added to the spleen cell cultures. We determined that 30% (vol:vol) MK conditioned media (CM) were able to completely block OC development from precursors, whereas 3% MK CM resulted in up to a 10-fold reduction in OC development, P < 0.001. These data indicate that a soluble factor(s) was responsible, at least in part, for the inhibition. We examined MK CM for known inhibitors of OC formation, using ELISAs. IL-4 was undetectable in MK CM, whereas IL-10 and IFN-gamma levels were similar in MK and non-MK CM. TGFbeta-1 levels were increased 2-fold in MK CM compared to control CM but were not responsible for the inhibition in OC development. Although, we found a significant increase in the levels of osteoprotegerin (OPG) in MK CM, antibody neutralization studies, MK derived from OPG-deficient mice, and tandem mass spectrophotometry, all confirm that OPG was not responsible for the MK-mediated inhibition of OC development. Overall, these data suggest that an unidentified factor(s) is present in MK CM that inhibits OC development. These studies indicate that MK can play a dual role in skeletal homeostasis by stimulating OB proliferation and simultaneously inhibiting OC development.