Osteoclast (OC)-mediated lytic bone disease remains a cause of major morbidity in multiple myeloma. Here we demonstrate the critical role of interleukin-17-producing marrow infiltrating lymphocytes (MILs) in OC activation and development of bone lesions in myeloma patients. Unlike MILs from normal bone marrow, myeloma MILs possess few regulatory T cells (Tregs) and demonstrate an interleukin-17 phenotype that enhances OC activation. In univariate analyses of factors mediating bone destruction, levels of cytokines that selectively induce and maintain the Th17 phenotype tightly correlated with the extent of bone disease in myeloma. In contrast, MILs activated under conditions that skew toward a Th1 phenotype significantly reduced formation of mature OC. These findings demonstrate that interleukin-17 T cells are critical to the genesis of myeloma bone disease and that immunologic manipulations shifting MILs from a Th17 to a Th1 phenotype may profoundly diminish lytic bone lesions in multiple myeloma.