Parathyroid hormone (PTH) regulates calcium homeostasis and bone metabolism by activating PTH type I receptor (PTH1R). Here we show that transforming growth factor (TGF)-β type II receptor (TβRII) forms an endocytic complex with PTH1R in response to PTH and regulates signalling by PTH and TGF-β. TβRII directly phosphorylates the PTH1R cytoplasmic domain, which modulates PTH-induced endocytosis of the PTH1R–TβRII complex. Deletion of TβRII in osteoblasts increases the cell-surface expression of PTH1R and augments PTH signalling. Conditional knockout of TβRII in osteoblasts in mice results in a high bone mass with increased trabecular bone and decreased cortical bone, similar to the bone phenotype in mice expressing a constitutively active PTH1R. Disruption of PTH signalling by injection of PTH(7–34) or ablation of PTH1R rescues the bone phenotype of TβRII knockout mice. These studies reveal a previously unrecognized function for TβRII and a mechanism for integration of PTH and local growth factor at the membrane receptor level.