The specific biologic function of the cell-surface or membrane-bound isoform of colony stimulating factor-1 (mCSF-1) is not well understood. To help define the role of this isoform in bone, we developed a transgenic mouse in which targeted expression of human mCSF-1 in osteoblasts was achieved under the control of the 2.4 kb rat collagen type I promoter. Bone density determined by pQCT was reduced by 7% in mCSF-1 transgenic compared with wild-type mice. Histomorphometric analyses indicated that the numbers of osteoclasts in bone (NOc/BPm, NOc/TAR, OcS/BS) was significantly increased in transgenic mice (1.7-1.8 fold, P < 0.05 - P < 0.01) compared with wild-type animals. Interestingly, the osteoblast-restricted isoform transgene corrected the osteopetrosis seen in CSF-1 deficient op/op mice. Skeletal growth and bone density in op/op mice expressing mCSF-1 in osteoblasts, were similar to wild-type mice and dramatically different from unmanipulated op/op animals. The op/op mice expressing mCSF-1 in bone had normal incisor and molar tooth eruption while the op/op mice evidenced the expected failure of tooth eruption. These findings directly support the conclusion that mCSF-1 is functionally active in bone in vivo and likely is an important local source of CSF-1.