1,25-Dihydroxyvitamin D₃ (1,25(OH)₂D₃) and prostaglandin E₂ (PGE₂) are known to influence osteoclast formation indirectly through their effects on osteoblasts. To determine whether 1,25(OH)₂D₃ and PGE₂ also have a direct effect on circulating osteoclast precursors, these factors were added to long-term cultures of human peripheral blood mononuclear cells (PBMCs) in the presence of osteoprotegerin ligand and macrophage colony-stimulating factor (M-CSF) (±dexamethasone). The number of TRAP⁺ and VNR⁺ multinucleated cells and the area of lacunar resorption were decreased when 1,25(OH)₂D₃ alone was added. A marked increase in resorption pit formation was noted when the combination of 1,25(OH)₂D₃ and dexamethasone was added to PBMC cultures. Dose-dependent inhibition of osteoclast formation and lacunar resorption was seen when PGE₂ was added to PBMC cultures in both the presence and the absence of dexamethasone. Thus, 1,25(OH)₂D₃ and PGE₂ not only influence osteoclast formation in the presence of bone stromal cells but also act directly on circulating osteoclast precursors to influence osteoclast differentiation.