We studied estrogen effects on osteoclastic differentiation using RAW264.7, a murine monocytic cell line. Differentiation, in response to RANKL and colony-stimulating factor 1, was evaluated while varying estrogen receptor (ER) stimulation by estradiol or nonsteroidal ER agonists was performed. The RAW264.7 cells were found to express ERalpha but not ERbeta. In contrast to RANKL, which decreased ERalpha expression and induced osteoclast differentiation, 10 nm estradiol, 3 microm genistein, or 3 microm daidzein all increased ERalpha expression, stimulated cell proliferation, and decreased multinucleation, with the effects of estrogen > or = daidzein > genistein. However, no estrogen agonist reduced RANKL stimulation of osteoclast differentiation markers or its down-regulation of ERalpha expression by more than approximately 50%. Genistein is also an Src kinase antagonist in vitro, but it did not decrease Src phosphorylation in RAW264.7 cells relative to other estrogen agonists. However, both phytoestrogens and estrogen inhibited RANKL-induced IkappaB degradation and NF-kappaB nuclear localization with the same relative potency as seen in proliferation and differentiation assays. This study demonstrates, for the first time, the direct effects of estrogen on osteoclast precursor differentiation and shows that, in addition to effecting osteoblasts, estrogen may protect bone by reducing osteoclast production. Genistein, which activates ERs selectively, inhibited osteoclastogenesis less effectively than the nonselective phytoestrogen daidzein, which effectively reproduced effects of estrogen.