Multiple myeloma is characterized by extensive bone destruction with little or no new bone formation. A multiplicity of factors including receptor activator NF-κB (RANKL), macrophage inflammatory protein-1α, interleukin-3 and interleukin-6 can induce osteoclast formation in myeloma and drive the bone destructive process. Furthermore, factors are also produced either in the microenvironment or by myeloma cells themselves, which inhibit osteoblast differentiation and new bone formation. The combination of increased osteoclast formation with little or no bone repair in response to the previous bone destruction explains the severity of the bone disease in myeloma. Studies of the pathophysiology of myeloma bone disease have identified several novel therapeutic targets. These include antibodies to RANKL, chemokine receptor antagonists, which block the effects of chemokines on osteoclast differentiation and proteasome antagonists, which can affect both RANKL production and osteoprotegerin levels as well as inhibit osteoclast and enhance osteoblast differentiation. In addition, many of the new biologic agents being used for the treatment of patients with myeloma also further inhibit the bone destructive process. New therapies that can target both the tumor as well as the severe bone disease should be on the horizon to treat this devastating complication of myeloma.