Although it has been established that PTH exerts potent anabolic effects on bone in animals and humans, the mechanism of PTH action on bone remains controversial. Based on the previous findings that PTH treatment increased production of IGF-I in bone cells and that PTH effects on bone cells in vitro were blocked by IGF-I–blocking antibodies, we proposed that IGF-I action is required for the stimulatory effects of PTH on bone formation. To test this hypothesis, we evaluated the effects of PTH on bone formation parameters in growing mice lacking functional IGF-I genes. Five-week-old IGF-I(−/−) mice and wild-type littermates were given daily sc injections of 160 μg/kg body weight of PTH (1–34) or vehicle for 10 d. In wild-type animals, PTH caused a significant increase in serum osteocalcin levels (113%), serum alkaline phosphatase activity (48%), and alkaline phosphatase activity in femoral bone extracts (>80%), compared with the vehicle-treated control group. In contrast, in IGF-I(−/−) mice, there was no significant effect of PTH on any bone formation parameters. PTH treatment increased total bone mineral density, as evaluated by peripheral quantitative computer tomography, at the distal metaphysis of the femur by 40% in wild-type mice, but it had no effect on bone mineral density in mice lacking functional IGF-I genes. In vitro studies using osteoblasts derived from control and IGF-I(−/−) mice revealed that PTH treatment increased cell number in osteoblasts derived from IGF-I knockout mice in the presence of exogenously added IGF-I but not without IGF-I. These data to our knowledge provide the first direct evidence that the anabolic effects of PTH on bone formation in vivo require IGF-I action in growing mice.