After years of controversy it is now clear that these cells develop from the self fusion of macrophages. It was in the beginning of 1980 that the monocyte phagocytic system was recognized as precursor of osteoclasts. Osteoclast formation requires the presence of RANKL (receptor activator of nuclear factor κβ ligand) and M-CSF (Macrophage colony-stimulating factor). These membrane-bound proteins are produced by neighbouring stromal cells and osteoblasts, thus requiring direct contact between these cells and osteoclast precursors. M-CSF acts through its receptor on the osteoclast, c-fms (colony-stimulating factor 1 receptor), a transmembrane tyrosine kinase-receptor, leading to secondary messenger activation of tyrosine kinase Src. Both of these molecules are necessary for osteoclastogenesis and are widely involved in the differentiation of monocyte/macrophage derived cells. RANKL is a member of the tumour necrosis family (TNF), and is essential in osteoclastogenesis. RANKL knockout mice exhibit a phenotype of osteopetrosis and defects of tooth eruption, along with an absence or deficiency of osteoclasts. RANKL activates NF-κβ (nuclear factor-κβ) and NFATc1 (nuclear factor of activated t cells, cytoplasmic, calcineurin-dependent 1) through RANK. NF-κβ activation is stimulated almost immediately after RANKL-RANK interaction occurs and is not upregulated. NFATc1 stimulation, however, begins ~24–48 hours after binding occurs and its expression has been shown to be RANKL dependent. Osteoclast differentiation is inhibited by osteoprotegerin (OPG), which is produced by osteoblasts and binds to RANKL thereby preventing interaction with RANK. It may be important to note that while osteoclasts are derived from the hematopoietic lineage, osteoblasts are derived from mesenchymal stem cells.
Mutations in the cathepsin K gene are associated with pycnodysostosis, a hereditary osteopetrotic disease, characterised by a lack of functional cathepsin K expression. Knockout studies of cathepsin K in mice lead to an osteopetrotic phenotype, which, is partially compensated by increased expression of proteases other that cathepsin K and enhanced osteoclastogenesis. Cathepsin K has an optimal enzymatic activity in acidic conditions. It is synthesized as a proenzyme with a molecular weight of 37kDa, and upon activation by autocatalytic cleavage, is transformed into the mature, active form with a molecular weight of ~27kDa. Upon polarization of the osteoclast over the site of resorption, cathepsin K is secreted from the ruffled border into the resorptive pit. Cathepsin K transmigrates across the ruffled border by intercellular vesicles and is then released by the functional secretory domain. Within these intercellular vesicles, cathepsin K, along with reactive oxygen species generated by TRAP, further degrades the bone extracellular matrix. Several other cathepsins are expressed in osteoclasts including cathepsins B, C, D, E, G, and L.  The function of these cysteine and aspartic proteases is generally unknown within bone, and they are expressed at much lower levels than cathepsin K.
Studies on cathepsin L knockout mice have been mixed, with a report of reduced trabecular bone in homozygous and heterozygous cathepsin L knockout mice compared to wild-type and another report finding no skeletal abnormalities. Matrix metalloproteinases
The matrix metalloproteinases (MMPs) comprise a family of more than 20 zinc-dependent endopeptidases.