Recent investigations have indicated that cytokines such as tumor necrosis factor-alpha (TNF-α) play a potential role in the bone resorption associated with inflammatory diseases. In this immunoperoxidase study. TNF-α was localized in mononuclear cells, macrophages, fibroblasts, osteoblasts, and osteoclasts adjacent to bone resorption areas in both human and experimental middle ear cholesteatomas. In vitro, TNF-α stimulated monocytes to form multinucleated cells that demonstrate tartrate-resistant acid phosphatase activity, a marker enzyme for osteoclasts. These multinucleated osteoclast-like cells induce resorption of devitalized bone. The extent of bone resorption was increased by the co-cultures of osteoblasts and osteoclasts in the presence of TNF-α, suggesting that cell to cell interaction plays a significant role in bone resorption. Moreover, TNF-α was capable of stimulating macrophages to produce acid phosphatase and collagenase, and osteoblasts to produce prostaglandin E2 and collagenase. These chemical mediators have been known to lead to bone resorption. Our findings suggest that TNF-α may play an important clinical role in the destructive process of cholesteatoma. © 1991.