Parathyroid hormone (PTH) plays a major role in bone remodeling and has the ability to increase bone mass if administered daily. In vitro, PTH inhibits the growth of osteoblastic cell lines, arresting them in G(1) phase. Here, we demonstrate that PTH regulates the expression of at least three genes to achieve the following: inducing expression of MAPK phosphatase 1 (MKP-1) and p21(Cip1) and decreasing expression of cyclin D1 at both mRNA and protein levels. The induction of MKP-1 causes the dephosphorylation of extracellular signal-regulated kinase and therefore the decrease in cyclin D1. Overexpression of MKP-1 arrests UMR cells in G(1) phase. The mechanisms involved in PTH regulation of these genes were studied. Most importantly, PTH administration produces similar effects on expression of these genes in rat femoral metaphyseal primary spongiosa. Analyses of p21(Cip1) expression levels in bone indicate that repeated daily PTH injections make the osteoblast more sensitive to successive PTH treatments, and this might be an important feature for the anabolic functions of PTH. In summary, our data suggest that one mechanism for PTH to exert its anabolic effect is to arrest the cell cycle progression of the osteoblast and hence increase its differentiation.