Osteosarcoma is usually associated with a disturbed bone metabolism. The aim of this work was to characterize the reciprocal interactions between MG63 osteosarcoma cells and osteoclasts, in a co-culture system. Co-cultures were characterized throughout 21 days for the osteoclastogenic response and the expression of osteoblastic markers. Monocultures of MG63 cells and peripheral blood mononuclear cell (PBMC) and co-cultures of PBMC + human bone marrow cells (hBMC) were also performed. Compared to PBMC cultures, co-cultures yielded significantly increased gene expression of osteoclast-related markers, tartarate-acid resistant phosphatase (TRAP) activity, TRAP-positive multinucleated cells, cells with actin rings and vitronectin receptors (VNR) and calcitonin receptors (CTR) and calcium phosphate resorbing ability. Results showed that the development of functional osteoclasts required a very low number of MG63 cells, suggesting a high osteoclastogenic-triggering capacity of this cell line. Subjacent mechanisms involved the pathways MEK and NF-kB, although with a lower relevance than that observed on PBMC monocultures or co-cultures of hBMC + PBMC; PGE2 production also had a contribution. Compared to MG63 cell monocultures, the co-culture expressed lower levels of COL1 and ALP, and higher levels of BMP-2, suggesting that PBMC also modulated the osteoblastic behavior. While M-CSF appeared to be involved in the osteoclastogenic response on the MG63 + PBMC co-cultures, RANKL does not seem to be a key player in the process. On the other hand, sphingosine-1-phosphate production might contribute to the modulation of the osteoblastic behavior. Results suggest that the reciprocal modulation between osteosarcoma and osteoclastic cells might contribute to the disturbed bone metabolism associated with bone tumors. J. Cell. Biochem. 112: 3704–3713, 2011. © 2011 Wiley Periodicals, Inc.