We have recently cloned cathepsin K from a human bone cDNA library. Since cathepsins are proposed to be involved in the degradation of mineralized bone matrix, we have investigated, by in situ hybridization and immunocytochemistry, the expression of the cathepsin K mRNA transcripts and protein in sections of bone and giant cell tumor to determine which cells express this enzyme. Within all tissues studied, cathepsin K was highly expressed in osteoclasts. Futhermore, the expression of cathepsin K mRNA in giant cell tumor tissue appeared to be confined to the periphery of the osteoclast indicating a compartmentalization of the mRNA. Immunohistochemistry confirmed the specific localization of cathepsin K to the osteoclast. In actively resorbing osteoclasts, the immunostaining was localized at the ruffled border, whereas in osteoclasts in sections of giant cell tumor, staining was observed in lysosomal vacuoles, which in some cases were seen to fuse with the cell membrane. Other cells within the bone, such as osteoblasts and osteocytes, did not express either the cathepsin K transcript or protein. However, there were very low levels of cathepsin K detected in a population of mononuclear cells, possibly representing osteoclast progenitor cells, within the marrow/stromal layer. The specific localization of cathepsin K within osteoclasts would therefore indicate the potential role of this enzyme in the bone resorptive process.