Osteoclasts are terminally differentiated cells derived from hematopoietic stem cells. However, how their precursor cells diverge from macrophagic lineages is not known. We have identified early and late stages of osteoclastogenesis, in which precursor cells sequentially express c-Fms followed by receptor activator of nuclear factor B (RANK), and have demonstrated that RANK expression in early-stage of precursor cells (c-Fms RANK) was stimulated by macrophage colony-stimulating factor (M-CSF). Although M-CSF and RANKL (ligand) induced commitment of late-stage precursor cells (c-Fms RANK) into osteoclasts, even late-stage precursors have the potential to differentiate into macrophages without RANKL. Pretreatment of precursors with M-CSF and delayed addition of RANKL showed that timing of RANK expression and subsequent binding of RANKL are critical for osteoclastogenesis. Thus, the RANK–RANKL system determines the osteoclast differentiation of bipotential precursors in the default pathway of macrophagic differentiation.