The recent observation that estrogen synthesis occurs in osteoblast-like cells has suggested the aromatase activity as a possible local modulator of bone remodeling in post-menopausal women. To provide further insights into the androstenedione conversion to estrogen in bone-derived cells, we examined the human leukaemic cell line FLG 29.1, which is induced to differentiate toward the osteoclastic phenotype by TPA and TGF-beta1. Southern blot of RT-PCR products with a 32P-labeled cDNA probe for the human aromatase demonstrated that FLG 29.1 cells express aromatase mRNA. The enzyme activity, determined by measuring [3H]H2O release from [3H]androstenedione, obeyed Michaelis-Menten kinetic with apparent Km and Vmax values ranging from 5 to 10 nM and from 200 to 400 fmol/mg protein/6 h. Gene expression, enzyme activity and protein immunoreactivity, evaluated by immunocytochemistry, were stimulated in a time-dependent fashion by 5% charcoal-stripped FCS and by either 1-100 nM TPA or 0.01-0.5 ng/ml TGF-beta1, with maximal responses after 2-3 h exposure. After 24 h incubation of FLG 29.1 cells in the absence of these stimuli the aromatase mRNA and the protein were barely detectable. These findings demonstrate that cells of the osteoclastic lineage synthesize estrogen in vitro and that local cytokines, such as TGF-beta1, are able to induce androstenedione conversion.