Heparanase, an enzyme that cleaves the heparan sulfate chains of proteoglycans, is upregulated in many human tumors including multiple myeloma. We have shown previously using animal models that heparanase promotes robust myeloma tumor growth and spontaneous metastasis to bone. In the present study, the role of heparanase in promoting myeloma bone disease was investigated. CAG human myeloma cells expressing either high or low levels of heparanase (heparanase-high or heparanase-low cells) were directly injected into the marrow cavity of human fetal long bones implanted subcutaneously in SCID mice (SCID-hu model). A second, non-injected human fetal bone was implanted on the contralateral side. Seven weeks after injection of myeloma cells into the primary bone, mice were euthanized and the osteolytic disease of both implanted bones was evaluated. Both X-ray and microCT analysis revealed marked osteolysis in the primary bones injected with heparanase-high cells, with little osteolytic disease detected in the bones injected with heparanase-low cells. Surprisingly, the non-injected, contralateral bones of the animals bearing heparanase-high tumors were also extensively degraded. Immunohistolochemical analysis of these contralateral bones revealed that osteolysis occurred in the absence of detectable tumor cells in the bone. Consistent with this osteolytic phenotype, TRAP staining of the primary and contralateral human bones harvested from mice bearing heparanase-high tumors showed a significant increase in osteoclast numbers, as compared to bones harvested from animals bearing heparanase-low tumors. In a second approach using heparanase-high or heparanase-low cells injected into the tibia of SCID mice, heparanase again enhanced osteolysis at the site of tumor injection as well as at distal sites, in the absence of resident tumor cells. These findings parallel our previously published observation that heparanase expressing breast cancer cells implanted in the mammary fat pad induced an increase in bone resorption in the absence of tumor cells within bone. The evidence in vivo suggested the release from heparanase-high cells of factor(s) that increase osteoclast formation. To test this idea, in vitro osteoclastogenesis assays were used to test the conditioned medium from heparanase-high cells. The conditioned medium from heparanase-high cells significantly enhanced osteoclastogenesis compared to conditioned medium from heparanase-low cells. Interestingly, conditioned medium derived from CAG cells expressing heparanase mutants lacking enzymatic activity failed to enhance osteoclastogenesis. Together, these data demonstrate for the first time that expression of heparanase is a major determinant of the osteolytic phenotype in myeloma. Increased osteolysis is the result of increased osteoclastogenesis that requires active heparanase enzyme and can occur in bones distal to the primary tumor prior to any subsequent metastasis. Thus, we hypothesize that therapies designed to block heparanase function will not only inhibit tumor growth, but may also protect bone from tumor-related bone destruction and possibly disrupt the metastasis of tumor to bone.