A major cause of morbidity in rheumatoid arthritis (RA) is the destruction of the extracellular matrix (ECM) of cartilage, bone, and soft tissues of the joint. Proteolytic enzymes, such as the matrix metalloproteinases (MMPs) and the recently characterized and cloned aggrecanases with disintegrin domains, have a role in these destructive processes that result in loss of fibrillar (collagens) and nonfibrillar components of the ECM. MMPs, eg collagenases, cannot degrade the ECM of mineralized bone, but mechanisms require action of specialized cells (osteoclasts) generated from hemopoietic precursors in marrow and in the inflammatory cell mass. Ligands, which increase bone resorption, initiate osteoclast generation by acting on mesenchymal cells (fibroblasts, stromal cells, and osteoblasts) to induce cell-bound osteoclast differentiation factor (ODF). ODF in turn binds to a receptor (RANK) on osteoclast precursors and, with M-CSF, generates active osteoclasts. Another factor, osteoprotegerin (OPG), binds to ODF (also known as OPGL [ligand]) and inhibits osteoclastogenesis. A potent inducer of ODF is parathyroid hormone-related peptide (PTHrP); receptors for PTH/PTHrP are found on RA synovial fibroblasts, in culture, and by in situ hybridization, and PTH is produced by RA synovium through the action of inflammatory cytokines. There is evidence derived from studies in animal models that the action of collagenase produced by mesenchymal cells is required for PTH/PTHrP-induced osteoclast generation. Delineation of the precise function of the ligands and proteinases described would help in designing therapy to prevent or retard the focal bone erosions and more diffuse bone loss of RA.