The current paradigm for drug discovery requires the identification of a target involved in the disease process (e.g. enzyme or receptor) and the development of an appropriate ligand (activator, inhibitor or selective modulator). Selection of ligands for clinical development is based on the therapeutic window between efficacy vs. safety and ADME (absorption, distribution, metabolism and elimination) considerations. For bisphosphonates (BPs) the process has not followed that paradigm. BPs have very low absorption and are retained in bone, their target tissue. A few have been used on a limited basis for over 20 years in diseases of rapid bone destruction (e.g. post-menopausal osteoporosis, Pagets disease, bone metastases, etc.), without understanding their molecular mechanism of action. The nitrogen-containing BPs (N-BPs) are the latest and most potent addition to this family of compounds and have the widest use. They have high potency, are specifically targeted to the osteoclast on bone and are used at very low doses (5-10 mg clinically). Over the last four years, there was significant progress in elucidating the mechanism of action of BPs, both lacking and containing nitrogen. This review will focus on the mechanism of action of the N-BPs, specifically alendronate (ALN) and risedronate (RIS), the two agents most widely used. For these and all other N-BPs, the molecular target is the isoprenoid biosynthetic enzyme, farnesyl diphosphate synthase, in the cholesterol biosynthesis pathway. Although inhibition of this enzyme by N-BPs results in the suppression of sterol biosynthesis, it is actually disruption of a branch pathway, isoprenylation, that is responsible for N-BP pharmacological activity. Isoprenylation involves covalent linkage of the 15 or 20 carbon isoprene moiety farnesyl diphosphate or geranylgeranyl diphosphate, respectively, to the carboxy-terminus of regulatory proteins, including the small GTPases Ras, Rac, Rho and Cdc42. The latter three, as well as numerous others, are geranylgeranylated and play a rate-limiting role in the activity of the bone-resorbing osteoclast. This targeted osteoclast inhibition accounts for the potency of the N-BPs and for their ability to elicit the desired therapeutic response of suppressing bone turnover. The occasional gastrointestinal irritation caused by N-BPs appears to be mechanism-based and is also briefly reviewed.