Two factors of crucial importance in bone cell differentiation were discovered within the last two years. One is the transcription factor Osf2/Cbfa1, which allows mesenchymal stem cells to differentiate into osteoblasts. Soluble factors, including bone morphogenetic proteins (BMPs), leptin, and TGF-beta, can modulate differentiation of mesenchymal stem cells to osteoblasts or to other cell types such as chondrocytes or adipocytes. The other recent discovery is osteoclast differentiating factor (ODF), which is specific for and indispensable to osteoclast differentiation. ODF belongs to the TNF family. Its soluble receptor, osteoprotegerin, prevents it from binding to osteoclasts, thus inhibiting its activity. A role of lymphocytes in bone remodeling has long been suspected, and it has now been shown that ODF is produced by activated T lymphocytes, which may therefore be implicated in bone loss accompanying inflammation. Finally, recent evidence supports a role for B lymphocytes in bone loss secondary to estrogen deprivation. In conclusion, these recent data may have important applications. Osteoprotegerin is a potent antiosteoclast agent that may prove useful in the treatment of bone disorders. Osf2/Cbfa1 and ODF are major targets in the treatment of osteoporosis.