We developed a rodent model that mimics the osteoblastic and osteolytic changes associated with human metastatic prostate cancer. Microarray analysis identified MMP-7, cathepsin-K, and apolipoprotein D as being upregulated at the tumor-bone interface. MMP-7, which was produced by osteoclasts at the tumor-bone interface, was capable of processing RANKL to a soluble form that promoted osteoclast activation. MMP-7-deficient mice demonstrated reduced prostate tumor-induced osteolysis and RANKL processing. This study suggests that inhibition of MMP-7 will have therapeutic benefit in the treatment of prostate cancer-induced osteolysis.