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Multiple myeloma (MM), a hematologic malignancy of terminally differentiated plasma cells is closely associated with induction of osteolytic bone disease, induced by stimulation of osteoclastogenesis and suppression of osteoblastogenesis. The ubiquitin-proteasome pathway regulates differentiation of bone cells and MM cell growth. The proteasome inhibitor, bortezomib, is a clinical potent antimyeloma agent. The main goal of this study was to investigate the effect of bortezomib on myeloma-induced bone resorption and tumor growth in SCID-rab mice engrafted with MM cells from 16 patients. Antimyeloma response of bortezomib, which was evident in >50% of 16 experiments and resembled clinical response, was associated with significant increased bone mineral density (BMD) and osteoblast numbers, and reduced osteoclast numbers in myelomatous bones. This bone anabolic effect, which was also visualized on X-ray radiographs and confirmed by static and dynamic histomorphometric analyses, was unique to bortezomib and was not observed in hosts responding to melphalan, a chemotherapeutic drug widely used to treat MM. Bortezomib also increased BMD and osteoblasts number and reduced osteoclasts number in nonmyelomatous implanted bones. In vitro bortezomib directly suppressed human osteoclast formation and promoted maturation of osteoblasts. We conclude that bortezomib promotes bone formation in myelomatous and nonmyelomatous bones by simultaneously inhibiting osteoclastogenesis and stimulating osteoblastogenesis. As clinical and experimental studies indicate that bone disease is both a consequence and necessity of MM progression our results suggest and that bortezomib's effects on bone remodeling contribute to the antimyeloma efficacy of this drug.