Osteoclasts, the multinucleated cells that resorb bone, differentiate from hemopoietic precursors of the monocyte/macrophage lineage in the presence of M-CSF and receptor activator of NF-κB ligand (RANKL). In this study we investigated the role of IL-3 in osteoclast differentiation. We show here that IL-3, a cytokine secreted by activated T lymphocytes, inhibits RANKL-induced osteoclast differentiation by a direct action on early osteoclast precursors. Anti-IL-3 Ab neutralized the inhibitory effect of IL-3 on osteoclast differentiation. In addition, IL-3 inhibits TNF-α-induced osteoclast differentiation in bone marrow-derived macrophages. However, IL-3 has no inhibitory effect on mature osteoclasts. In osteoclast precursors, IL-3 prevents RANKL-induced nuclear translocation of NF-κB by inhibiting the phosphorylation and degradation of IκB. RT-PCR analysis revealed that IL-3 down-regulated c-Fos transcription. Interestingly, the osteoclast precursors in the presence of IL-3 showed strong expression of macrophage markers such as Mac-1, MOMA-2, and F4/80. Furthermore, the inhibitory effect of IL-3 on osteoclast differentiation was irreversible, and the osteoclast precursors preincubated in IL-3 were resistant to RANKL action. Thus, our results reveal for the first time that IL-3 acts directly on early osteoclast precursors and irreversibly blocks RANKL-induced osteoclast differentiation by diverting the cells to macrophage lineage.