Multiple myeloma (MM), a malignancy of plasma cells, develops in the bone marrow, and generates devastating bone destruction. Along with enhanced bone resorption, clinical evidence has also suggested suppression of bone formation as a contributing factor to the bone loss in MM. In contrast to recent understanding on mechanisms of osteolysis enahnced in MM, little is known about factors responsible for impaired bone formation. A canonical Wingless-type (Wnt) signaling pathway has recently been shown to play a critical role in osteoblast differentiation. Therefore, in the present study, we aimed to clarify mechanisms of suppression of osteoblast differentiation by MM cells with a particular focus on a canonical Wnt signaling pathway. Because several secreted Frizzled related protein (sFRP) and DKK family members are known as soluble Wnt antagonists, we first examined the expression of sFRP-1, 2 and 3 and DKK-1 in MM cell lines including U266, RPMI8226 and ARH77. All cell lines expressed sFRP-2 and sFRP-3 mRNA observed by RT-PCR. However, sFRP-1 was not expressed in any cell line, and Dkk-1 was expressed only in U266 cells at mRNA levels. We next conducted Western blot analyses for these factors and detected only sFRP-2 in immunoprecipitants of conditioned media as well as cell lysates of all these cell lines. However, no other factors were found at protein levels. Furthermore, sFRP-2 mRNA and protein expression was detected in most MM cells from patients with advanced or terminal stages of MM with bone destruction including plasma cell leukemia (3/4 and 8/10, respectively). In order to examine a biological role for sFRP-2, we added recombinant sFRP-2 to MC3T3-E1 cell culture together with BMP-2. Exogenous sFRP-2 partially suppressed alkaline phosphatase activity but almost completely mineralized nodule formation enhanced by BMP-2. Furthermore, sFRP-2 immunodepletion significantly restored mineralized nodule formation in MC3T3-E1 cells suppressed by RPMI8226 and ARH77 CM. These results suggest that sFRP-2 alone is able to suppress osteoblast differentiation induced by BMP-2 and that MM cell-derived sFRP-2 is among predominant factors responsible for defective bone formation in MM. Because MM cell-derived factors such as DKK-1, IGF-BP4 and IL-3 other than sFRP-2 have been implicated as an inhibitor of osteoblast differentiation, sFRP-2 may act alone or in combination with such other factors to potently suppress bone formation in MM. Taken together, MM cells may cause an imbalance of bone turnover with enhanced osteoclastic bone resorption and concomitantly suppressed bone formation, which leads to devastating destruction and a rapid loss of bone.