An adequate supply of Ca2+ is critical for normal growth plate development. Previous studies suggest that changes in extracellular [Ca2+] ([Ca2+]e) modulate the function of chondrocytes with high [Ca2+]e promoting cell differentiation. In contrast, signal transduction by the PTH/PTHrP type I receptor (PTH1R) slows down chondrocyte differentiation. This study addressed whether changes in [Ca2+]e modulate the differentiation of mouse growth plate chondrocytes by interacting with PTHrP/PTH1Rs. Raising [Ca2+]e from 0.5-3.0 mM dose-dependently promoted the development of mouse growth plate chondrocytes as indicated by decreases in proteoglycan accumulation and in the expression of early differentiation marker genes and by increases in mineral deposition and in the expression of markers of terminal differentiation. The effects of high [Ca2+]e on gene expression and matrix synthesis were blunted by incubating cells with PTHrP and vice versa. High [Ca2+]e also suppressed the expression of PTH1Rs. Chronic stimulation of PTHrP/PTH1R signaling by adenoviral expression of constitutively active human PTH1Rs (223hPTH1Rs) reduced the effects of high [Ca2+]e on proteoglycan synthesis and gene expression. Similar results were seen when we treated cells with forskolin or 8-bromo-cAMP. Taken together, these data support the idea that the pace of chondrocyte differentiation depends on a balance of interactions between PTHrP/PTH1R and extracellular Ca2+ signaling and that high [Ca2+]e promote cell differentiation potentially by reducing the availability of PTH1Rs and the level of cAMP-dependent signal transduction.