Dendritic cells (DC) are innate immune effectors and are critically involved in regulating T cell immunity. Osteoclasts (OC) are bone-resorbing cells derived from the monocyte/macrophage lineage in response to receptor activator of NF-kappaB ligand (RANKL). DC and T cells form aggregates in the inflammatory infiltrates at active disease sites in human and in experimental rheumatoid arthritis and periodontitis. We investigated whether DC interactions with T cells in the bone environment can support the development of functional OC. In the present study, we demonstrate that upon proper activation by microbial or protein Ags (namely Actinobacillus actinomycetemcomitans, bovine insulin, and outer membrane protein-1) and during immune interactions with CD4+ T cells in vitro, murine BM-derived and splenic CD11c+ DC (CD11b- F4/80- Ly-6C- CD31-) develop into TRAP+ CT-R+ cathepsin-k+ functional OC in a RANKL/RANK-dependent manner. Rescue and blocking experiments using CD11c+ DC derived from Csf-1(-/-) op/op mice show that M-CSF is required "before" developing such osteoclastogenic potential upstream of RANKL/RANK signaling, suggesting that immature CD11c+ DC can indeed act like OC precursors. In addition, these CD11c+ DC-derived OC are capable of inducing bone loss after adoptive transfer in vivo. These data suggest a direct contribution of DC during immune interactions with CD4+ T cells to inflammation-induced osteoclastogenesis. Therefore, our findings not only provide further evidence for DC plasticity, but also extend the current paradigm of osteoimmunology.