The expression of parathyroid hormone‐related protein (PTHrP) was studied in a range of cell cultures representative of the osteoblast lineage and in rat calvarial sections. Primary newborn rat calvarial cells, a rat preosteoblastic cell line (UMR 201), a mouse stromal cell line (ST 2), a mouse calvaria‐derived osteoblastic cell line (KS 4), and rat osteosarcoma cell lines (UMR 106‐01 and ‐06), all expressed PTHrP when examined by reverse transcription polymerase chain reaction (RT‐PCR). Using a radioimmunoassay we also demonstrated PTHrP in the conditioned medium of the cultured cells, with the exception of UMR 106‐01 and ‐06 cells. Treatment of UMR 201 cells with all‐trans‐retinoic acid which induces them to acquire a more differentiated phenotype, also led to a time‐dependent decrease in PTHrP mRNA levels as determined by RT‐PCR, Northern blot analysis, and in situ hybridization. Decreased PTHrP levels in the conditioned medium of the treated cells was also observed. These results suggested that PTHrP production might be greater in less mature osteoblasts. Examination of the populations obtained from newborn rat calvariae by sequential collagenase digestion revealed that the early digests exhibited low ALP activity, low expression of PTH/PTHrP receptor mRNA, and no adenylate cyclase response to PTHrP(1–34). These populations showed the highest level of mRNA and production of PTHrP. Cells from later digests, the “osteoblast‐rich” populations, had reduced PTHrP expression. Immunohistochemistry and in situ hybridization in sections of newborn rat calvariae showed PTHrp expression in cuboidal osteoblasts located adjacent to bone and in spindle‐shaped cells in the periosteal region. It is concluded that PTHrP is produced by cells of the osteoblast lineage, supporting the hypothesis that PTHrP may function physiologically as a paracrine factor in bone. © 1996 Wiley‐Liss, Inc.