Osteoprotegerin (OPG) is a potent inhibitor of osteoclast formation and function. To elucidate how OPG is regulated in bone, we examined (1) the expression and localization of OPG protein in bone tissue, (2) the effect of human parathyroid hormone 1–38 (hPTH 1–38) on OPG messenger RNA (mRNA) levels in rat femur metaphyseal and diaphyseal bone, and (3) the effect of hPTH(1–38) on expression of OPG mRNA in cultured osteoblast‐like cells derived from the metaphysis and diaphysis, and in ROS 17/2.8 osteosarcoma cells. Because PTH has been shown to stimulate osteoblast activity via the cyclic adenosine monophosphate (cAMP)/protein kinase A (PKA) signal transduction pathway we also investigated whether PTH action on OPG in vivo is dependent on activation of cAMP/PKA pathway. Immunohistochemistry was used to evaluate OPG protein expression and Northern blot hybridization was used to analyze OPG mRNA expression both in vivo and in vitro. Immunohistochemistry of OPG protein expression in the rat distal femur metaphysis revealed that it was localized predominantly in preosteoblasts, osteoblasts, lining cells, and the osteoid layer, with occasional immunoreactivity in osteocytes and cells of the bone marrow. Subcutaneous (sc) administration of a single injection of hPTH(1–38) at 80 μg/kg induced a rapid and transient decrease in OPG mRNA expression in both metaphyseal and diaphyseal bone. The decrease in OPG message was evident by 1 h and mRNA levels returned to baseline after 3 h. PTH analog PTH(1–31), which stimulates intracellular cAMP accumulation, inhibited OPG expression, whereas PTH analogs (3–34 and 7–34) that do not stimulate cAMP production had no effect on expression. In contrast to PTH, prostaglandin E₂ (PGE₂) had no effect on OPG mRNA expression in vivo in the metaphyseal bone cells, under conditions in which PGE₂ does promote expression of the c‐fos gene. The in vivo effects of hPTH(1–38) on OPG mRNA were confirmed in isolated primary osteoblast cultures derived from either metaphyseal or diaphyseal bone as well as in ROS 17/2.8 osteosarcoma cells. We propose that the rapid and transient decrease in OPG expression may initiate a cascade of events resulting in the differentiation of osteoclast progenitor. Such a spatially and temporally programmed effect of PTH might contribute to bone turnover. (J Bone Miner Res 2000;15:863–871)