Recent studies have proposed a role for serotonin and its transporter in regulation of bone cell function. In the present study, we examined the in vitro effects of serotonin and the serotonin transporter inhibitor fluoxetine “Prozac” on osteoblasts and osteoclasts. Human mononuclear cells were differentiated into osteoclasts in the presence of serotonin or fluoxetine. Both compounds affected the total number of differentiated osteoclasts as well as bone resorption in a bell-shaped manner. RT-PCR on the human osteoclasts demonstrated several serotonin receptors, the serotonin transporter, and the rate-limiting enzyme in serotonin synthesis, tryptophan hydroxylase 1 (Tph1). Tph1 expression was also found in murine osteoblasts and osteoclasts, indicating an ability to produce serotonin. In murine pre-osteoclasts (RAW264.7), serotonin as well as fluoxetine affected proliferation and NFκB activity in a biphasic manner. Proliferation of human mesenchymal stem cells (MSC) and primary osteoblasts (NHO), and 5-HT2A receptor expression was enhanced by serotonin. Fluoxetine stimulated proliferation of MSC and murine preosteoblasts (MC3T3-E1) in nM concentrations, µM concentrations were inhibitory. The effect of fluoxetine seemed direct, probably through 5-HT2 receptors. Serotonin-induced proliferation of MC3T3-E1 cells was inhibited by the PKC inhibitor (GF109203) and was also markedly reduced when antagonists of the serotonin receptors 5-HT2B/C or 5-HT2A/C were added. Serotonin increased osteoprotegerin (OPG) and decreased receptor activator of NF-κB ligand (RANKL) secretion from osteoblasts, suggesting a role in osteoblast-induced inhibition of osteoclast differentiation, whereas fluoxetine had the opposite effect. This study further describes possible mechanisms by which serotonin and the serotonin transporter can affect bone cell function. J. Cell. Biochem. 98: 139–151, 2006. © 2006 Wiley-Liss, Inc.