Deletion of the c-src gene in transgenic mice by homologous recombination leads to osteopetrosis, a skeletal defect characterized by markedly deficient bone resorption (Soriano, P., C. Montgomery, R. Geske, and A. Bradley. 1991. Cell. 64:693-702), demonstrating a critical functional role of pp60c-src in osteoclast activity. Since decreased bone resorption could result from a defect either within the osteoclast or within other cells present in its environment, indirectly affecting osteoclast functions, we determined which cell(s) in bone expressed high levels of pp60c-src Measuring pp60c-src protein and kinase activities in osteoclasts and immunolocalizing pp60c-src in bone, we find that expression of pp60c-src is nearly as high in osteoclasts as in brain and platelets. In contrast, other bone cells contain only very low levels of the protein. In addition, expression of the c-src gene product increases when bone marrow cells are induced to express an osteoclast-like phenotype by 1,25-dihydroxy-vitamin D3, further suggesting that high expression of pp60c-src is part of the osteoclast phenotype. Three other src-like kinases, c-fyn, c-yes, and c-lyn, are also expressed in osteoclasts at ratios to pp60c-src similar to what is found in platelets. These src-related proteins do not, however, compensate for the absence of pp60c-src in the src- mice, thereby suggesting that pp60c-src may have a specific function in osteoclasts. Although further work is necessary to elucidate what the critical role of pp60c-src in osteoclasts is, our observation that the protein is associated mostly with the membranes of intracellular organelles suggests the possibility that this role might be at least in part related to the targeting or fusion of membrane vesicles.