The reaction of superoxide with nitroblue tetrazolium produces an electron-dense diformazan precipitate which can be used to localize areas of superoxide production. Transmission electron microscopy was used to demonstrate that diformazan granules formed by the reaction of nitroblue tetrazolium with excess superoxide are electron dense, whereas monoformazan granules generated by hydrogen peroxide were not. On the basis of these observations, superoxide formed along the osteoclast-bone interface was localized by demonstrating the electron-dense diformazan granules between the osteoclastic membrane and the bone surface. The formation of this reaction product was inhibited by a superoxide scavenger, the deferoxamine mesylate-manganese complex (the "green" complex), confirming the specificity of the reaction product. The scavenger also inhibited bone resorption. High concentrations of superoxide generated in vitro at a neutral pH degraded osteocalcin into numerous peptide fragments, demonstrating the ability of superoxide to break peptide bonds. These studies localize superoxide production to the ruffled border space and suggest that superoxide generated at the osteoclast-bone interface is involved in bone matrix degradation.