Vascular endothelial cells participate to the process of bone formation through the production of factors regulating osteoclast differentiation and function. Here we report the selective expression in primary human microvascular endothelial cells (HMVEC) of Osteostat/TNF Superfamily 18 (TNFSF18), a ligand of the TNF superfamily. Osteostat protein is detectable in HMVEC and is highly upregulated by interferon (IFN)- and IFN-. Moreover, an anti-Osteostat antibody strongly binds to the vascular endothelium in human tissues, demonstrating that the protein is present in the endothelial cell layers surrounding blood vessels. Functional in vitro assays were used to define Osteostat involvement in osteoclastogenesis. Both recombinant and membrane bound Osteostat inhibit differentiation of osteoclasts from monocytic precursor cells. Osteostat suppresses the early stage of osteoclastogenesis via inhibition of macrophage colony-stimulating factor (M-CSF)-induced receptor activator of NF-B (RANK) expression in the osteoclast precursor cells. This effect appears to be specific for the differentiation pathway of the osteoclast lineage, since Osteostat does not inhibit lipopolysaccharide (LPS)-induced RANK expression in monocytes and dendritic cells, or activation-induced RANK expression in T cells. These findings demonstrate that Osteostat is a novel regulator of osteoclast generation and substantiate the major role played by the endothelium in bone physiology.