In rheumatoid arthritis (RA) and other arthritic disorders e.g. gout, there is destruction of articular cartilage and juxta-articular bone. Osteoclasts are specialised multinucleated cells (MNCs) that carry out bone resorption. It has previously been shown that circulating monocytes and synovial macrophages in RA can be stimulated to differentiate into functional osteoclasts in the presence of RANKL and M-CSF. The aim of this study was to determine whether the mononuclear cells present in synovial fluid of RA patients are capable of differentiating into functional osteoclasts in the presence of osteogenic factors. Mononuclear cells were isolated from the synovial fluid obtained from patients with Ra, osteoarthritis (OA) gout and joint trauma. The cells were seeded onto dentine slices and coverslips and cultured for up to 21 days in the presence/absence of RANKL (30ng/ml) and M-CSF (25ng/ml). Cells cultured on coverslips for 24h, 14 and 21 days were assessed for the expression of the monocyte-macrophage antigen CD14 that is known to be expressed by osteoclasts, and the osteoclast associated markers; tartrate-resistant acid phosphatase (TRAP) and vitronectin receptor (VNR). After 21 days, dentine slices were assessed for evidence of osteoclastic lacunar resorption. After 24 h culture on coverslips mononuclear cells isolated from the synovial fluid of all the above joint conditions were largely CD14+, and entirely negative for TRAP and VNR. After 14 days culture, in the presence of RANKL and M-CSF these synovial fluid macrophages were stimulated to form multinucleated osteoclasts which were TRAP+ and VNR+ and capable of forming resorption pits on dentine slices. In the absence of either RANKL or M-CSF osteoclast formation did not occur. The osteogenic factors RANKL and M-CSF have been shown to be present in the synovial fluid of patients with RA, OA, gout and joint trauma. Results from this study demonstrate that CD14+ mononuclear cells (macrophages) in the synovial fluid of patients with the above conditions have the capacity to differentiate into functional multinucleated osteoclasts in the presence of RANKL and M-CSF. These findings show that one cellular mechanisms whereby bone erosions many occur in arthritic disorders is through increased osteoclast formation of synovial fluid macrophages; this process requires RANKL and m-CSF, both of which are produced by inflammatory cells e.g. T Cells found in the synovial fluid and the arthritic synovial membrane.