Injections of parathyroid hormone (PTH) have been reported to stimulate skeletal accretion through increased bone formation in several species, and osteoblast proliferation is a critical component of bone formation. However, the biological mechanisms of PTH‐stimulated bone cell proliferation are largely unknown. In this study, we demonstrated that PTH stimulates proliferation of the osteoblast precursor cell line, TE‐85, in association with increasing cdc2 protein levels and its kinase activity. cdc2 antisense oligonucleotides blocked PTH‐induced DNA synthesis and cell cycle progression. Analysis of the time course of PTH‐stimulated cdc2 message levels demonstrated that cdc2 mRNA levels were increased 1.5‐ to 4‐fold between 3–18 h following release from cell synchronization. Transfections of TE‐85 cells with a series of cdc2 promoter‐luciferase deletion constructs revealed PTH stimulation of the cdc2 promoter. Promoter constructs containing a mutation in the E2F binding site were not stimulated by PTH. Gel mobility shift assays demonstrated increased free E2F levels in TE‐85 nuclear extracts in response to PTH. Furthermore, the ratios of hyperphosphorylated to hypophosphorylated forms of Rb protein were increased by PTH treatment. These results demonstrate that PTH‐stimulated cdc2 expression was associated with TE‐85 cell proliferation and that the mechanism of stimulating cdc2 gene expression involved increasing the levels of free E2F.