The osteoclast (OCL) is the primary cell involved in the pathogenesis of Paget's disease (PD) and the destructive bone process in multiple myeloma (MM). Both of these diseases are characterized by increased numbers of OCLs actively resorbing bone, but they differ in that bone formation is greatly increased in PD and is suppressed in MM. The marrow microenvironment plays a critical role in both disease processes, through the increased expression of inflammatory cytokines that enhance osteoclastogenesis and, in the case of MM, also suppress osteoblast (OBL) activity. In addition, the OCLs in PD are intrinsically abnormal, are markedly increased in number and size, and are hyper-responsive to inflammatory cytokines and 1,25-(OH)2D3. This article discusses the role of immune cells and inflammatory cytokines and chemokines in the increased OCL activity in PD and MM bone disease, as well as the potential role of interleukin-3 in the suppression of OBL activity in MM.