Osteoclasts are multinucleate giant cells responsible for bone resorption. Osteoclast precursors are hematopoietic mononucleate cells, which give rise to osteoclasts after fusion. Nevertheless, the precise stage of differentiation where osteoclast precursors diverge from other hematopoietic lineages is still debated. We describe here both in vitro and in vivo approaches to the study of the osteoclast differentiation pathway. We used cells of the BM2 avian monocytic cell line, which are able to differentiate into macrophages both in vitro and in vivo. In order to follow the progeny of BM2 monocytes, we have derived a BM2 cell clone expressing the nlslacZ gene (BM2nlslacZ) which has still retained the main features of the parental cell line. In vitro, when BM2nlslacZ cells were triggered toward macrophages, they participated in the formation of multinucleate osteoclast-like cells as seen by their blue nuclei. Furthermore, when BM2nlslacZ cells were injected into the blood stream of chicken embryos, they could give rise to blue nucleate macrophages in the bone marrow, as well as to osteoclasts with blue nuclei in bone. Finally, we have shown that fusion of tagged mononucleate precursor cells not only occurs with other mononucleate precursor cells but also with mature multinucleate osteoclasts. This work shows that cells already engaged in the late stages of the monocytic differentiation pathway are able to differentiate into osteoclasts and that osteoclast divergence takes place after the monocyte stage.