Cells cultured from human giant cell tumors of bone were characterized on the basis of morphological features, proliferative capacity, presence of granulocyte-monocyte antigens, receptors for skeletal hormones, and soluble cell products. Three major cell types were identified. One population consisted of mononuclear cells with fibroblastic morphology, which proliferated in culture and most likely represent the neoplastic element of the tumor. Phenotypically they resembled a connective tissue stromal cell. A second population of mononuclear cells lacked receptors for skeletal hormones and did not persist in culture. These cells were likely of monocyte-macrophage lineage. A third population of cells consisted of large multinucleated giant cells. These cells possessed phenotypic features of osteoclasts including receptors for calcitonin. Human giant cell tumors of bone are most likely a neoplasm of connective tissue stromal cells, which have the capacity to recruit and interact with multinucleated giant cells that exhibit phenotypic features of osteoclasts.