Chronic bone infection, as attends periodontitis, is often complicated by severe osteolysis. While LPS is believed to be central to the pathogenesis of the osteolytic lesion, the mechanisms by which this bacteria-derived molecule promotes bone resorption are unknown. We find that LPS induces bone marrow macrophages (BMMs) to express c-src, a protooncogene product that we demonstrate is a specific marker of commitment to the osteoclast phenotype. We next turned to possible soluble mediators of LPS-induced c-src. Of a number of osteoclastogenic cytokines tested, only TNF-alpha mirrors the c-src-enhancing effect of LPS. Suggesting that LPS augmentation of c-src is TNF-mediated, endotoxin sequentially induces BMM expression of TNF, followed by c-src. TNF and c-src expression, by cultured BMMs derived from LPS-injected mice, reflects duration of exposure to circulating endotoxin, intimating that endotoxin's effect in vivo is also mediated by TNF. Consistent with these findings, thalidomide (which antagonizes TNF action) attenuates c-src induction by LPS. An anti-TNF antibody blocks LPS enhancement of c-src mRNA, validating the cytokine's modulating role in vitro. Using BMMs of TNF receptor-deleted mice, we demonstrate that TNF induction of c-src is transmitted through the cytokine's p55, but not p75, receptor. Most importantly, LPS administered to wild-type mice prompts osteoclast precursor differentiation, manifest by profound osteoclastogenesis in marrow cultured ex vivo, and by a profusion of marrow-residing cells expressing the osteoclast marker tartrate resistant acid phosphatase, in vivo. In contrast, LPS does not substantially enhance osteoclast proliferation in mice lacking the p55TNF receptor, confirming that LPS-induced osteoclastogenesis is mediated by TNF in vivo via this receptor. Thus, therapy targeting TNF and/or its p55 receptor presents itself as a means of preventing the osteolysis of chronic bacterial infection.