Cysteine proteinases, especially cathepsin K, play an important role in osteoclastic degradation of bone matrix proteins and the process can, consequently, be significantly inhibited by cysteine proteinase inhibitors. We have recently reported that cystatin C and other cysteine proteinase inhibitors also reduce osteoclast formation. However, it is not known which cysteine proteinase(s) are involved in osteoclast differentiation. In the present study, we compared the relative potencies of cystatins C and D as inhibitors of bone resorption in cultured mouse calvariae, osteoclastogenesis in mouse bone marrow cultures, and cathepsin K activity. Inhibition of cathepsin K activity was assessed by determining equilibrium constants for inhibitor complexes in fluorogenic substrate assays. The data demonstrate that whereas human cystatins C and D are equipotent as inhibitors of bone resorption, cystatin D is 10-fold less potent as an inhibitor of osteoclastogenesis and 200-fold less potent as an inhibitor of cathepsin K activity. A recombinant human cystatin C variant with Gly substitutions for residues Arg8, Leu9, Val10, and Trp106 did not inhibit bone resorption, had 1,000-fold decreased inhibitory effect on cathepsin K activity compared to wildtype cystatin C, but was equipotent with wildtype cystatin C as an inhibitor of osteoclastogenesis. It is concluded that (i) different cysteine proteinases are likely to be involved in bone resorption and osteoclast formation, (ii) cathepsin K may not be an exclusive target enzyme in any of the two systems, and (iii) the enzyme(s) involved in osteoclastogenesis might not be a typical papain-like cysteine proteinase.