Previous studies found that bone morphogenic proteins (BMPs) support osteoclast formation, but it is not clear whether this is a direct effect on osteoclasts or mediated indirectly through osteoblasts. We have shown that a mouse deficient for the BMP antagonist Twisted gastrulation suggested a direct positive role for BMPs on osteoclastogenesis. In this report, we further determine the significance of BMP signaling on osteoclast formation in vitro. We find that BMP2 synergizes with suboptimal levels of receptor activator of NF-κB ligand (RANKL) to enhance in vitro differentiation of osteoclast-like cells. The enhancement by BMP2 is not a result of changes in the rate of proliferation or survival of the bone marrow-derived cultures, but is accompanied by an increase in expression of genes involved in osteoclast differentiation and fusion. Treatment with BMP2 did not significantly alter expression of RANKL or OPG in our osteoclast cultures, suggesting that the enhancement of osteoclastogenesis is not mediated indirectly through osteoblasts or stromal cells. Consistent with this, we detected phosphorylated SMAD1,5,8 (p-SMAD) in the nuclei of mononuclear and multinucleated cells in osteoclast cultures. Levels of p-SMAD, BMP2, and BMP receptors increased during differentiation. RNAi suppression of Type II BMP receptor inhibited RANKL-stimulated formation of multinuclear TRAP-positive cells. The BMP antagonist noggin inhibited RANKL-mediated osteoclast differentiation when added prior to day 3, while addition of noggin on day 3 or later failed to inhibit their differentiation. Taken together, these data indicate that osteoclasts express BMP2 and BMP receptors, and that autocrine BMP signaling directly promotes the differentiation of osteoclasts-like cells. J. Cell. Biochem. 109: 672–682, 2010. © 2009 Wiley-Liss, Inc.