Osteoblasts have been shown to modulate osteoclast activity, but the reverse process has not been investigated. In the current study conditioned medium (CM) was collected from osteoclasts and osteoclast-like cells and its effects on osteoblast alkaline phosphatase (ALPase) activity and collagen synthesis ([3H]proline hydroxylation) were determined. In primary chick osteoblasts, cultured chick embryo frontal bones, and UMR-106-01 cells, collagen synthesis and ALPase activity, but not [3H]thymidine incorporation, were inhibited by CM from chick marrow-derived giant cells, which possess some of the phenotypic characteristics of osteoclasts. However, collagen synthesis in chick embryo fibroblasts was not affected by giant cell CM. CM collected from cultures of chicken osteoclasts and human osteoclastoma cells and marrow-derived giant cells inhibited collagen synthesis in UMR-106-01 cells, but the effects on ALPase activity varied with the cell type. In contrast, mononuclear cell and fibroblast CM did not alter collagen synthesis. Initial characterization studies demonstrate that the inhibitor is a heat-labile factor with a molecular weight greater than 3500. In summary, authentic osteoclasts, tumor osteoclast-like cells, and chicken and human multinucleated giant cells produce a soluble factor that alters osteoblast collagen synthesis, suggesting that osteoclasts play a role in the modulation of osteoblast activity.