Tartrate-resistant acid phosphatase (TRACP) is produced by macrophages and other cells of the monohistiocytic lineage. In particular, osteoclasts are characterized for a high expression of this enzyme. Yet, several data suggest that other bone cell types, such as osteocytes and osteoblasts, may also express activity of this enzyme. This is particularly obvious at sites were osteoclasts resorb bone, suggesting that osteoclasts (or their precursors) somehow induce TRACP activity in osteoblasts. In the present study, we investigated this by culturing human osteoblast-like cells with and without conditioned medium (MCM) from human blood monocytes (as a source of osteoclast precursors). High levels of TRACP activity were found in osteoblast-like cells cultured with MCM. Depletion of TRACP from this medium resulted in the absence of its activity in osteoblast-like cells, thus suggesting that the TRACP activity in these cells was the result of endocytosed TRACP that was released by the monocytes in the MCM. Osteoblast-like cells cultured in control (non-conditioned) medium contained very low levels of TRACP-like activity. However, the cells expressed TRACP mRNA and incubation of extracts of these cells with active cathepsin B did induce activity of a TRACP-like enzyme. Inhibition of the activity of cysteine proteinases in general and of cathepsin B in particular, completely blocked TRACP activity of the osteoblast-like cells. This TRACP-like enzyme but not the alleged endocytosed fraction of TRACP was inhibited by fluoride, suggesting that the fractions may be different isoenzymes. Our data seem to indicate that osteoblast-like cells may contain two different fractions of TRACP, one that is released by monocytes and subsequently endocytosed by osteoblast-like cells and a second endogenous fraction that is present in an inactive proform. We hypothesize that the capacity of osteoblast-like cells to endocytose TRACP is important for the removal of this enzyme during or following the bone resorptive activity of the osteoclast.