Paget disease of bone is characterized by abnormalities in all phases of bone remodeling, but the fundamental cellular abnormality resides in the osteoclast (OCL). Osteoclasts in bone involved by Paget disease contain viral‐like nuclear and cytoplasmic inclusions that react with antibodies directed against paramyxovirus nucleocapsid proteins, such as measles virus, respiratory syncytial virus, or canine distemper virus. However, the identity of the virus or the mechanisms responsible for its persistence or pathologic role in Paget disease is unclear. Furthermore, although Paget disease persists for many years, it remains a highly localized process with new lesions rarely if ever developing in previously unaffected bones. Since osteoclasts are formed by fusion of mononuclear precursors derived from colony forming unit‐granulocyte macrophage (CFU‐GM), the granulocyte‐macrophage progenitor, we used reverse transcriptase polymerase chain reaction (RT‐PCR) analysis to determine if CFU‐GM, more differentiated osteoclast precursors, and peripheral blood cells derived from CFU‐GM express measles virus nucleocapsid (MV‐N) transcripts. We found that osteoclast precursors, as well as peripheral blood mononuclear cells, express MV transcripts in 9 of 13 patients. Sequence analysis of the PCR amplified products confirmed nucleotide identity of MV‐N transcripts expressed in peripheral blood and bone marrow‐derived cells from the same patient. In contrast, MV‐N transcripts were not detected in OCL precursors or the peripheral blood from 10 normal subjects. In situ hybridization studies using ³⁵S‐labeled antisense riboprobes to MV‐N transcripts further confirmed the expression of MV transcripts in these cells. Sequence analysis of the PCR amplified product from one of these patients also identified a novel mutation that converted lysine₄₄₁ to glutamic acid₄₄₁ in the MV‐N transcript. These data demonstrate that OCL precursors and circulating peripheral blood cells also express MV transcripts in patients with Paget disease and suggest that the pagetic marrow microenvironment plays a critical role in maintaining the highly localized nature of the lesions in Paget disease. (J Bone Miner Res 1996;11:1602–1607)