PTH is an anabolic agent used to treat osteoporosis, but its mechanisms of action are unclear. This study elucidated target cells and mechanisms for anabolic actions of PTH in mice during bone growth. Mice with c-fos ablation are osteopetrotic and lack an anabolic response to PTH. In this study, there were no alterations in PTH-regulated osteoblast differentiation or proliferation in vitro in cells from c-fos -/- mice compared with +/+; hence, the impact of osteoclastic cells was further investigated. A novel transplant model was used to rescue the osteopetrotic defect of c-fos ablation. Vertebral bodies (vossicles) from c-fos -/- and +/+ mice were implanted into athymic hosts, and the c-fos -/- osteoclast defect was rescued. PTH treatment to vossicle-bearing mice increased 5-bromo-2′-deoxyuridine (BrdU) positivity in the bone marrow and increased bone area regardless of the vossicle genotype. To inhibit recruitment of osteoclast precursors to wildtype vossicles, stromal derived factor-1 signaling was blocked, which blunted the PTH anabolic response. Treating mice with osteoprotegerin to inhibit osteoclast differentiation also blocked the anabolic action of PTH. In contrast, using c-src mutant mice with a late osteoclast differentiation defect did not hinder the anabolic action, suggesting key target cells reside in the intermediately differentiated osteoclast population in the bone marrow. These results indicate that c-fos in osteoblasts is not critical for PTH action but that cells of the osteoclast lineage are intermediate targets for the anabolic action of PTH. Copyright © 2005 by The Endocrine Society.