Cells of the monocyte-macrophage series play multiple roles in bone resorption; they appear to act as osteoclast precursors and are known to elaborate several substances which promote osteoclast activity. Because bone formation is closely linked (coupled) to resorption under physiological conditions, we explored the possibility that macrophages also elaborate a stimulator of bone formation. Our results indicate that rat resident peritoneal and bone marrow macrophages elaborate a potent stimulator of DNA synthesis and growth in osteoblasts (as well as chondrocytes) cultured from the calvaria of rat fetuses. Growth factor activity resides mainly in a 43 000-dalton heat-stable protein, though a lower molecular weight peptide (Mr approximately 10 000) also contained growth-promoting activity. In contrast to osteoblasts and chondrocytes, skin fibroblasts prepared from the same rat fetuses exhibited only a minimal response to the macrophage-derived factor, though they responded briskly to epidermal and fibroblast growth factors. These findings are consistent with the thesis that macrophages direct both phases of remodeling, resorption and formation, and therefore may be responsible for coupling these events.