Although fibroblast growth factor (FGF) 23 was recently identified as a phosphatonin that influences vitamin D metabolism, the underlying signaling mechanisms remain unclear. FGF23 elevates the renal levels of membrane‐associated klotho as well as soluble klotho. Klotho is expressed on distal tubules. Upon enzymatic cleavage, soluble klotho is released into the renal interstitial space and then into the systemic circulation. The expression of 25‐hydroxyvitamin D₃ 1α‐hydroxylase (1‐OH) on proximal tubular cells is controlled by parathyroid hormone (PTH). Klotho binds to various membrane proteins to alter their function. Here, the interaction between the PTH receptor and klotho was studied using various approaches, including immunoprecipitation, in vitro cell culture, and in vivo animal experiments. Immunoprecipitation studies demonstrate, for the first time, that recombinant human klotho protein interacts with human PTH receptors to inhibit the binding of human PTH. Furthermore, when applied to human proximal tubular cells, recombinant human klotho suppresses PTH‐stimulated generation of inositol trisphosphate in vitro. Moreover, PTH‐induced increase of cyclic AMP secretion and 1α,25‐dihydroxyvitamin D₃ (1,25VD) was attenuated by recombinant human klotho in vivo. In addition, recombinant human klotho inhibits the expression of 1‐OH by PTH both in vitro and in vivo. These results suggest that free klotho mediates the FGF23‐induced inhibition of 1,25VD synthesis. © 2015 American Society for Bone and Mineral Research.