In the tumor microenvironment, CD11b⁺Gr1⁺ bone marrow–derived cells are a predominant source of protumorigenic factors such as matrix metalloproteinases (MMP), but how distal tumors regulate these cells in the bone marrow is unclear. Here we addressed the hypothesis that the parathyroid hormone–related protein (PTHrP) potentiates CD11b⁺Gr1⁺ cells in the bone marrow of prostate tumor hosts. In two xenograft models of prostate cancer, levels of tumor-derived PTHrP correlated with CD11b⁺Gr1⁺ cell recruitment and microvessel density in the tumor tissue, with evidence for mediation of CD11b⁺Gr1⁺ cell–derived MMP-9 but not tumor-derived VEGF-A. CD11b⁺Gr1⁺ cells isolated from mice with PTHrP-overexpressing tumors exhibited relatively increased proangiogenic potential, suggesting that prostate tumor–derived PTHrP potentiates this activity of CD11b⁺Gr1⁺ cells. Administration of neutralizing PTHrP monoclonal antibody reduced CD11b⁺Gr1⁺ cells and MMP-9 in the tumors. Mechanistic investigations in vivo revealed that PTHrP elevated Y418 phosphorylation levels in Src family kinases in CD11b⁺Gr1⁺ cells via osteoblast-derived interleukin-6 and VEGF-A, thereby upregulating MMP-9. Taken together, our results showed that prostate cancer–derived PTHrP acts in the bone marrow to potentiate CD11b⁺Gr1⁺ cells, which are recruited to tumor tissue where they contribute to tumor angiogenesis and growth. Cancer Res; 73(22); 6574–83. ©2013 AACR.