We screened a human osteoclast (OCL) cDNA expression library for OCL inhibitory factors and identified a clone that blocked both human and murine OCL formation and bone resorption by more than 60%. This clone was identical to human legumain, a cysteine endopeptidase. Legumain significantly inhibited OCL-like multinucleated cell formation induced by 1,25-dihydroxyvitamin D(3) (1,25-(OH)(2)D(3)) and parathyroid hormone-related protein (PTHrP) in mouse and human bone marrow cultures, and bone resorption in the fetal rat long bone assay in a dose-dependent manner. Legumain was detected in freshly isolated marrow plasma from normal donors and conditioned media from human marrow cultures. Furthermore, treatment of human marrow cultures with an antibody to legumain induced OCL formation to levels that were as high as those induced by 1,25-(OH)(2)D(3). Implantation in nude mice of 293 cells transfected with the legumain cDNA and constitutively expressing high levels of the protein significantly reduced hypercalcemia induced by PTHrP by about 50%, and significantly inhibited the increase in OCL surface and in OCL number expressed per mm(2) bone area and per mm bone surface induced by PTHrP. These results suggest that legumain may be a physiologic local regulator of OCL activity that can negatively modulate OCL formation and activity.