Bone metabolism requires tightly coupled activities exhibited by two unique cell populations, the bone-resorbing osteoclasts and the bone-forming osteoblasts. Imbalance in the function of these two cell types can result in osteoporosis, a condition characterized by loss in bone integrity and of bone mass. We developed a human bone cell culture model that allows the in vitro study of bone formation and osteoclastogenesis and employed this bone model for the screening and pharmacological analyses of protein and small molecule therapeutics. The cytokines, interleukin-6 (IL-6) and granulocyte macrophage colony stimulating factor (GM-CSF), play an intricate role in osteoclastogenesis in this system. Neutralizing antibodies to IL-6 and GM-CSF decreased the formation of osteoclast-like cells. SP500263, an early lead compound from a novel class of selective estrogen receptor modulators (SERMs), was more efficacious than estrogen and comparable to raloxifene in blocking cytokine production and formation of osteoclast-like cells. Our research demonstrates the usefulness of the in vitro co-culture model in the dissection of molecular events relevant to bone metabolism and provides greater insight into a potential novel role for cytokines in bone resorption. Furthermore, representatives of the SP500263 family of SERMs may be effective as therapeutics for the treatment of osteoporosis.