Ewing's sarcoma (ES) is a poorly differentiated pediatric tumor of aggressive behavior characterized by propensity to metastasize to bone. Interactions between the tumor and bone cells orchestrate a vicious cycle in which tumor cells induce osteoclast differentiation and activation to cause osteolytic lesions, broken bones, pain, and hypercalcemia. The lack of controllable models that can recapitulate osteolysis in ES impedes the development of new therapies and limits our understanding of how tumor cells invade bone. In response to this need, tissue-engineered models are now being developed to enable quantitative, predictive studies of human tumors. In this study, we report a novel bioengineered model of ES that incorporates the osteolytic process. Our strategy is based on engineering human bone containing both osteoclasts and osteoblasts within three-dimensional mineralized bone matrix. We show that the bone matrix is resorbed by mature osteoclasts while the new bone matrix is formed by osteoblasts, leading to calcium release and bone remodeling. Introduction of ES cell aggregates into the bone niche induced decreases in bone density, connectivity, and matrix deposition. Additionally, therapeutic reagents, such as zoledronic acid, which have demonstrated efficacy in ES treatment, inhibited bone resorption mediated by osteoclasts in the tumor model.