Bisphosphonates are currently the most important and effective class of anti-resorptive drugs available, but the exact molecular mechanisms by which they inhibit osteoclast-mediated bone resorption have only recently been identified. Due to the targeting of bisphosphonates to bone mineral and the ability of osteoclasts to release bone-bound bisphosphonate, a direct effect on mature osteoclasts appears to be the most important route of action. As a result of recent discoveries concerning their molecular mechanism of action, bisphosphonates can be grouped into two classes. The simple bisphosphonates that closely resemble PPi (such as clodronate, etidronate and tiludronate) can be metabolically incorporated into non-hydrolysable analogues of ATP that accumulate intracellularly in osteoclasts, resulting in induction of osteoclast apoptosis. By contrast, the more potent, nitrogen-containing bisphosphonates (such as pamidronate, alendronate, risedronate, ibandronate and zoledronate) appear to act as analogues of isoprenoid diphosphate lipids, thereby inhibiting FPP synthase, an enzyme in the mevalonate pathway. Inhibition of this enzyme in osteoclasts prevents the biosynthesis of isoprenoid lipids (FPP and GGPP) that are essential for the post-translational farnesylation and geranylgeranylation of small GTPase signalling proteins. Loss of bone-resorptive activity and osteoclast apoptosis is due primarily to loss of geranylgeranylated small GTPases. Identification of FPP synthase as the target of nitrogen-containing bisphosphonates has also helped explain the molecular basis for the adverse effects of these agents in the GI tract and on the immune system.