Tumor necrosis factor-alpha (TNF) is one member of a large family of inflammatory cytokines that share common signal pathways, including activation of the transcription factor nuclear factor kappa B (Nf-kappa B) and stimulation of the apoptotic pathway. Data derived from early work supported a role for TNF as a skeletal catabolic agent that stimulates osteoclastogenesis while simultaneously inhibiting osteoblast function. The finding that estrogen deficiency was associated with increased production of cytokines led to a barrage of studies and lively debate on the relative contributions of TNF and other cytokines on bone loss, on the potential cell sources of TNF in the bone microenvironment, and on the mechanism of TNF action. TNF has a central role in bone pathophysiology. TNF is necessary for stimulation of osteoclastogenesis along with the receptor activator of Nf-kappa B ligand (RANKL). TNF also stimulates osteoblasts in a manner that hinders their bone-formative action. TNF suppresses recruitment of osteoblasts from progenitor cells, inhibits the expression of matrix protein genes, and stimulates expression of genes that amplify osteoclastogenesis. TNF may also affect skeletal metabolism by inducing resistance to 1,25-dihydroxyvitamin D(3) (1,25(OH)(2)D(3)) by a mechanism that extends to other members of the steroid hormone nuclear receptor family. Thus, TNF assails bone at many levels. This review will focus on the cellular and molecular mechanisms of TNF action in the skeleton that result in increased bone resorption and impaired formation. TNF and its signal pathway remains an important target for the development of new therapies for bone loss from osteoporosis and inflammatory arthritis.