Osteoclast differentiation in the process of ectopic bone formation induced by recombinant human bone morphogenetic protein 2 (rhBMP-2) was examined to clarify the relationship between osteoclast development and rhBMP-2-induced bone formation. A combination of rhBMP-2 with a porous microsphere (PMS) and blood clot was implanted subcutaneously on the bilateral chest muscles of rats. Tartrate-resistant acid phosphatase (TRAPase) activity, cathepsin K (cath K), and calcitonin receptor (CTR), as markers of osteoclasts and their precursors, were examined using enzyme and immunohistochemical analysis up to 7 days after implantation. Mononuclear cells positive for TRAPase, cath K, and CTR first appeared on day 3 in connective tissue surrounding the PMS after implantation of rhBMP-2. Simultaneously, alkaline phosphatase activity became detectable in mesenchymal cells in the connective tissue. Electron microscopy demonstrated some mononuclear cells with abundant mitochondria and poorly developed rough endoplasmic reticulum in the proximity of mesenchymal cells. However, there was no evidence of cartilage or bone matrix formation on day 3. Osteoclasts in various stages of development, classified by the pattern of immunoreactivity for cath K, were observed by day 7. The polarized intracellular distribution of cath K was found only in osteoclasts attached to bone matrix. In conclusion, we have demonstrated for the first time the appearance of osteoclast precursors before bone matrix formation induced by rhBMP-2, suggesting that bone matrix is not a prerequisite for osteoclast precursor recruitment. Furthermore, we suggest that differentiation into polarized functional osteoclasts is accomplished when the osteoclasts attach to the bone matrix.