The adipokine adiponectin is a multi-functional protein which suppresses gluconeogenesis and stimulates fatty acid oxidation. The effects of adiponectin on bone, investigated in clinical studies, in animal models in vivo and in vitro, produced inconsistent results. Previously, we found that exogenous adiponectin inhibits osteoclastogenesis in vitro. Consistent with this, we have recently shown that adiponectin knockout (APN-KO) mice have decreased bone mineral density, although bone formation rate was similar to wild-type (WT). The aim of the current study was to investigate the effect of adiponectin deficiency on aspects of osteoclastogenesis. The formation of TRAP-positive multinucleated cells was studied in bone marrow (BM) cultures. Gene expression in tissues or cultured cells was analysed by real-time PCR . We found that osteoclastogenesis was significantly increased in BM cultures from APN-KO in comparison to WT mice. We next treated BM cultures undergoing osteoclastogenesis with either the PPAR-γ agonist, rosiglitazone, or the fatty acid stearate, since we found that both factors stimulated adiponectin expression in cultured BM cells from WT mice. The results showed that adiponectin-deficiency partially reversed the inhibition of osteoclastogenesis by rosiglitazone and stearate, suggesting that the inhibition is partially mediated by the increase in adiponectin expression stimulated by the two factors. Comparison of gene expression in different tissues of WT and APN-KO mice found that in white adipose tissue only, RANKL and TNF expression were 85-fold and 14-fold higher in APN-KO mice, respectively. These changes were not seen in cultured bone marrow cells. Our results suggest that adiponectin is inhibitory to osteoclastogenesis and plays a role in mediating the effects of other factors known to inhibit osteoclastogenesis. Increased levels of RANKL and TNF in white adipose tissue of APN-KO mice might contribute to increased bone resorption and the reduced bone density in these mice.