PTH recruits and activates osteoclasts to cause bone resorption. These actions of PTH are thought to be mediated indirectly via type 1 PTH/PTH-related peptide receptors (PTH1Rs) expressed by adjacent marrow stromal or osteoblastic cells, although some evidence suggests that PTH may act directly on early hematopoietic osteoclast progenitors. We have established clonal, conditionally immortalized, PTH-responsive, bone marrow stromal cell lines from mice that harbor both a transgene encoding a temperature-sensitive mutant of the simian virus 40 large T antigen and deletion of a single allele of the PTH1R gene. Of 60 stromal cell lines isolated, 45 expressed functional PTH1Rs. During coculture with normal murine spleen cells, 5 of 42 such cell lines could support formation of tartrate-resistant acid phosphatase-positive, multinucleated cells (TRAP⁺ MNCs) in response to 1,25-dihydroxyvitamin D₃, but only 2 of these did so in response to PTH. One of these, MS1 cells, expressed numerous cytokines and proteins characteristic of the osteogenic lineage and showed increased production of interleukin-6 in response to PTH. MS1 cells supported dose-dependent induction by rat (r) PTH-(1–34) (0.1–100 nm) of TRAP⁺ MNCs that expressed calcitonin receptors and formed resorption lacunae on dentine slices. This effect of PTH, which required cell to cell contact between MS1 and spleen cells, was mimicked by coadministration of cAMP analog and phorbol ester but only partially by either agent alone. The carboxyl-terminal fragment rPTH-(53–84) also induced osteoclast-like cell formation, but the maximal effect was only 30% as great as that of rPTH-(1–34). Importantly, rPTH-(1–34) induced TRAP⁺ MNC formation even when PTH1R^−/− osteoclast progenitors (from fetal liver of mice homozygous for ablation of the PTH1R gene) were cocultured with MS1 cells. We conclude that activation of PTH1Rs on cells of the osteoclast lineage is not required for PTH-(1–34)-induced osteoclast formation in the presence of appropriate PTH-responsive marrow stromal cells. MS1 cells provide a useful model for further study of PTH regulation of osteoclastogenesis.