Multiple myeloma, and the associated osteolytic bone disease, is highly dependent upon cellular interactions within the bone marrow microenvironment. A major limitation of existing myeloma models is the requirement for a specific host strain of mouse, preventing molecular examination of the bone marrow microenvironment. The aim of the current study was to develop a model of myeloma in which the host microenvironment could be modified genetically. The Radl 5T murine model of myeloma is well characterized and closely mimics human myeloma. In the current study, we demonstrate 5T myeloma establishment in recombination activating gene 2 (RAG-2)-deficient mice, which have improper B- and T-cell development. Importantly, these mice can be easily bred with genetically modified mice to generate double knockout mice, allowing manipulation of the host microenvironment at a molecular level. Inoculation of 5TGM1 myeloma cells into RAG-2^−/− mice resulted in myeloma development, which was associated with tumor growth within bone and an osteolytic bone disease, as assessed by microcomputed tomography (microCT), histology and histomorphometry. Myeloma-bearing RAG-2^−/− mice displayed many features that were similar to both human myeloma and the original Radl 5T model. To demonstrate the use of this model, we have examined the effect of host-derived matrix metalloproteinase 9 (MMP-9) in the development of myeloma in vivo. Inoculation of 5TGM1 myeloma cells into mice that are deficient in RAG-2 and MMP-9 resulted in a reduction in both tumor burden and osteolytic bone disease when compared with RAG-2-deficient wild-type myeloma-bearing mice. The establishment of myeloma in RAG-2^−/− mice permits molecular examination of the host contribution to myeloma pathogenesis in vivo.