There is increasing evidence that extracellular nucleotides act on bone cells via P2 receptors. This study investigated the action of ADP and 2‐methylthioADP, a potent ADP analog with selectivity for the P2Y₁ receptor, on osteoclasts, the bone‐resorbing multinuclear cells. Using three different assays, we show that ADP and 2–methylthioADP at nanomolar to submicromolar levels caused up to fourfold to sixfold increases in osteoclastic bone resorption. On mature rat osteoclasts, cultured for 1 day on polished dentine disks, peak effects on resorption pit formation were observed between 20 nM and 2 µΜ of ADP. The same concentrations of ADP also stimulated osteoclast and resorption pit formation in 10–day mouse marrow cultures on dentine disks. In 3–day explant cultures of mouse calvarial bones, the stimulatory effect of ADP on osteoclast‐mediated Ca²⁺ release was greatest at 5–50 µΜ and equivalent to the maximal effects of prostaglandin E₂. The ADP effects were blocked in a nontoxic manner by MRS 2179, a P2Y₁ receptor antagonist. Using in situ hybridization and immunocytochemistry, we found evidence for P2Y₁ receptor expression on both osteoclasts and osteoblasts;thus, ADP could exert its actions both directly on osteoclasts and indirectly via P2Y₁ receptors on osteoblasts. As a major ATP degradation product, ADP is a novel stimulator of bone resorption that could help mediate inflammatory bone loss in vivo.—Hoebertz, A., Meghji, S., Burnstock, G., Arnett, T. Extracellular ADP is a powerful osteolytic agent: evidence for signaling through the P2Y₁ receptor on bone cells.—Hoebertz, A., Meghji, S., Burnstock, G., Arnett, T. Extracellular ADP is a powerful osteolytic agent: evidence for signaling through the P2Y₁ receptor on bone cells. FASEB J. 15, 1139–1148 (2001)