The development of osteolytic breast cancer bone metastases relies on the ability of tumor cells to stimulate the formation of bone-resorbing osteoclasts. We have studied the effects of soluble factors produced by MDA-MB-231 breast carcinoma cells on osteoclast formation from human monocytic precursors and RAW 264.7 monocytic cells. Although factors produced by breast cancer cells were ineffective in inducing osteoclast formation from monocytes, priming with RANKL for 1-3 days dramatically increased receptiveness of osteoclast precursors to cancer-derived factors, which enhanced osteoclast formation 2-3 fold in the absence of supporting cell types. Osteoclasts formed by exposure to cancer factors expressed proteases critical for bone resorption, cathepsin K and matrix metalloproteinase 9, and were capable of resorbing calcified matrices. Expression of key osteoclastogenic transcription factor NFATc1 in osteoclast precursors was dramatically increased by short treatment with RANKL. NFATc1 was localized in the nuclei of primed osteoclast precursors when RANKL was present; however removal of RANKL led to rapid nuclear export of NFATc1. Cancer-derived factors were able to substitute for RANKL in supporting nuclear localization of NFATc1. Using neutralizing antibodies against TGFbeta, and a kinase inhibitor targeting the TGFbeta type I receptor, we identified TGFbeta as a permissive factor, required for the effects of breast cancer cells on NFATc1 nuclear accumulation and osteoclast formation. Our data suggest that, during differentiation, osteoclast precursors acquire the competency to respond to factors secreted by breast cancer cells, which may serve to promote tumor growth at skeletal sites undergoing active bone turnover.