Parathyroid hormone (PTH), an important regulator of calcium homeostasis, targets most of its complex actions in bone to cells of the osteoblast lineage. Furthermore, PTH is known to stimulate osteoclastogenesis indirectly through activation of osteoblastic cells. To assess the role of the PTH/PTH-related protein receptor (PPR) in mediating the diverse actions of PTH on bone in vivo, we generated mice that express, in cells of the osteoblastic lineage, one of the constitutively active receptors described in Jansen's metaphyseal chondrodysplasia. In these transgenic mice, osteoblastic function was increased in the trabecular and endosteal compartments, whereas it was decreased in the periosteum. In trabecular bone of the transgenic mice, there was an increase in osteoblast precursors, as well as in mature osteoblasts. Osteoblastic expression of the constitutively active PPR induced a dramatic increase in osteoclast number in both trabecular and compact bone in transgenic animals. The net effect of these actions was a substantial increase in trabecular bone volume and a decrease in cortical bone thickness of the long bones. These findings, for the first time to our knowledge, identify the PPR as a crucial mediator of both bone-forming and bone-resorbing actions of PTH, and they underline the complexity and heterogeneity of the osteoblast population and/or their regulatory microenvironment.