Bone resorption is a multistep process including osteoclast attachment, cytoskeletal reorganization, formation of four distinct plasma membrane domains, and matrix demineralization and degradation followed by cell detachment. The present study describes the intracellular mechanisms by which overexpression of cathepsin K in osteoclasts results in enhanced bone resorption. Osteoclasts and bone marrow-derived osteoclast and osteoblast precursors were isolated from mice homozygous (UTU17(+/+)) and negative for the transgene locus. Cells cultured on bovine cortical bone slices were analyzed by fluorescence and confocal laser scanning microscopy, and bone resorption was studied by measurements of biochemical resorption markers, morphometry, and FESEM. Excessive cathepsin K protein and enzyme activity were microscopically observed in various intracellular vesicles and in the resorption lacunae of cathepsin K-overexpressing osteoclasts. The number of cathepsin K-containing vesicles in UTU17(+/+) osteoclasts was highly increased, and co-localization with markers for the biosynthetic and transcytotic pathways was observed throughout the cytoplasm. As a functional consequence of cathepsin K overexpression, biochemical resorption markers were increased in culture media of UTU17(+/+) osteoclasts. Detailed morphometrical analysis of the erosion in bone slices indicated that the increased biosynthesis of cathepsin K was sufficient to accelerate the osteoclastic bone resorption cycle. Cathepsin K overexpression also enhanced osteogenesis and induced the formation of exceptionally small, actively resorbing osteoclasts from their bone marrow precursors in vitro. The present study describes for the first time how enhancement in one phase of the osteoclastic resorption cycle also stimulates its other phases and further demonstrate that tight control and temporal coupling of mesenchymal and hematopoietic bone cells in this multistep process.