Osteoclastogenesis inhibitory factor (OCIF) is a heparin-binding secretory glycoprotein that belongs to the tumor necrosis factor receptor (TNFR) family. OCIF is present both as a approximately 60-kDa monomer and a disulfide-linked homodimer. We attempted to characterize the seven structural domains of OCIF by determining the capabilities of various OCIF mutants to inhibit osteoclastogenesis, to interact with heparin, and to form dimers. We also examined a potential of domains 5 and 6, death domain homologous regions (DDHs), for inducing cell death by expressing OCIF/Fas fusion proteins. Our results show that: (i) the N-terminal portion of OCIF containing domains 1-4, which have structural similarity to the extracellular domains of the TNFR family proteins, is sufficient to inhibit osteoclastogenesis; (ii) a heparin-binding site is located in domain 7, and affinity for heparin does not correlate with the inhibitory activity; (iii) Cys-400 in domain 7 is the residue responsible for dimer formation; and (iv) the C-terminal portion containing domains 5 and 6, DDHs, has a high potential for mediating a cytotoxic signal when it is expressed in cells as an OCIF/Fas fusion protein in which the transmembrane region of Fas is inserted in front of DDHs.