We have determined transmembrane protein tyrosine phosphorylation (outside-in signaling) in cultured osteoclasts and macrophages in response to added native purified bone sialoprotein (nBSP) and its dephosphorylated form (dBSP). There were selective/differential and potent inhibitory effects by dBSP and minimal effect by nBSP on intracellular tyrosine phosphorylation in macrophages and osteoclasts. Further studies on the downstream gene expression effects led to identification of a large number of differentially expressed genes in response to nBSP relative to dBSP in both macrophages and osteoclasts. These studies were extended to a bone resorption model using live mouse neonatal calvarial bone organ cultures stimulated by parathyroid hormone (PTH) to undergo bone resorption. Inclusion of nBSP in such cultures showed no effect on type I collagen telopeptide fragment release, hence overall bone resorption, whereas addition of dBSP abolished the PTH-induced bone resorption. The inhibition of bone resorption by dBSP was shown to be unique since in complementary experiments use of integrin receptor binding ligand, GRGDS peptide, offered only partial reduction on overall bone resorption. Quantitative RANKL analysis indicated that mechanistically the PTH-induced bone resorption was inhibited by dBSP via down-regulation of the osteoblastic RANKL production. This conclusion was supported by the RANKL analysis in cultured MC3T3-E1 osteoblast cells. Overall, these studies provided direct evidence for the involvement of covalently bound phosphates on BSP in receptor mediated "outside-in" signaling via transmembrane tyrosine phosphorylation with concurrent effects on downstream gene expressions. The use of a live bone organ culture system augmented these results with further evidence that links the observed in vivo variable state of phosphorylation with bone remodeling.