Osteoclast differentiation is dependent on TGF-beta to prime precursors to the osteoclast lineage. The mechanism by which TGF-beta enables osteoclast formation is unknown. One possibility is that TGF-beta opposes pro-inflammatory JAK/STAT signalling. Recently, we showed that TGF-beta-induces SOCS3, an inhibitor of the JAK/STAT pathway, in precursors and enhances SOCS3 in RANKL-induced osteoclasts. We therefore elected to test the role of SOCS3 in the effect of other regulators of osteoclastic differentiation. We found that TNF-alpha-induced osteoclasts also express SOCS3 and TGF-beta strongly up-regulates this. Moreover, TNF-alpha-induced osteoclast differentiation and total resorbed bone area were enhanced in SOCS3-retrovirally infected precursors, whereas antisense knockdown of SOCS3 suppressed formation and the augmentative effect of TGF-beta. Furthermore, SOCS3 overexpression blunted the anti-osteoclastic effect of IFN-beta but not IL-10. This suggests that TGF-beta-induced expression of SOCS3 may represent a crucial mechanism by which TGF-beta antagonizes specific anti-osteoclastic JAK/STAT signals, priming precursors for resorption rather than inflammatory functions. (C) 2003 Elsevier Inc. All rights reserved.